An Ask Abaqus guide based on HMRC’s VAT Notice 700/1 (Last updated 4 August 2025)
Running a UK based business or supplying goods/services to the UK? You may need to register for VAT. Ask Abaqus is here to simplify what HMRC spells out in VAT Notice 700/1 so you can decide with confidence.
1. Who must register for VAT?
You’re required to register if:
• Your taxable turnover in the UK (sales excluding exempt items) exceeds £90,000 in the last 12 months.
• You expect to exceed that threshold in the next 30 days.
• You make taxable supplies in the UK, even if your business is non UK established (NETP). Thresholds may not apply in this case.
• You take over a UK VAT registered business, or make relevant asset supplies—even if turnover is below threshold.
2. Working out your taxable turnover
Your taxable turnover includes zero rated and standard rated supplies, but excludes exempt supplies and capital asset sales unless an option to tax applies.
For Northern Ireland acquisitions or distance sales into NI, separate thresholds may apply.
3. When should you register?
• If the threshold is exceeded in retrospect, your registration date is the first day of the second month after you exceeded the threshold.
• If the expectation of crossing it triggers registration, the registration date is when that expectation arose.
• NETPs must register within 30 days of making or expecting a taxable sale.
Once HMRC processes your application (VAT1 online or via forms), you’ll receive your VAT number—typically within 30 days.
4. Why voluntarily register?
Even below threshold, you may choose to register. Benefits include:
• Reclaiming VAT on business purchases (even up to four years retrospective).
• Boosting credibility—VAT-registered status can convey professionalism.
Tom Payne, Director at Ask Abaqus, comments:
“If your startup is incurring significant VAT able costs, registering early can yield valuable cash flow benefits.”
But there are downsides: quarterly VAT returns, extra bookkeeping, and the possible need to raise prices by 20%.
5. Ask Abaqus advice: Choosing the best approach
At Ask Abaqus, we emphasise a tailored approach to VAT registration. Tom Payne explains:
“Registration timing is business specific. Some firms benefit from early registration, while others delay until growth makes it mandatory. It’s about striking the right balance.”
If you supply goods across multiple countries or sell to NI/EU, distance selling rules and the One Stop Shop (OSS) scheme may apply—making the decision more complex.
6. What happens after you register?
Once you’re VAT registered, you must:
• Charge VAT (typically 20%) on all applicable sales.
• Keep accurate VAT invoices for sales and purchases.
• Submit VAT Returns—usually quarterly, unless on another scheme.
• Comply with required schemes (e.g. Making Tax Digital).
If you miss deadlines or fail to notify HMRC in time, penalties may apply.
7. Should you register? At a glance:
Scenario Advice
Turnover over £90k in past 12 months Must register
Expect turnover to exceed threshold in next 30 days Must register now
Non UK business selling into UK Register even with low volumes
Voluntary registration under threshold Consider if you incur VAT costs or want credibility
Occasional asset or business transfer Possible obligation - seek guidance
8. Tom’s final thoughts
“Every business is different. VAT registration isn’t just about the numbers—it’s about timing, client perception and long term planning. We often help clients weigh up registering early to reclaim costs, or waiting to minimise admin. The key is to align VAT strategy with your broader business goals.”
Want help with VAT Registration or compliance?
Ask Abaqus supports businesses of all sizes with:
• VAT status assessments
• Registration applications (VAT1, VAT1A etc.)
• Quarterly VAT returns and bookkeeping
• Advice on schemes such as flat rate, annual accounting or OSS
Get in touch - book your free consultation with us by calling: 01452 596 765. We’re here to guide you through VAT decisions with clarity and confidence.
Disclaimer: This blog is based on VAT Notice 700/1 as last updated 4 August 2025. It’s for general guidance and not professional tax advice. Consult a qualified advisor for your specific situation.
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