Should a new company opt for VAT registration There are a number of pros and cons to registering for VAT. These pointers should help you decide whether to opt for VAT registration or not. While it should be noted in the UK, you can become registered at anytime, planning in advance can save a lot of hassle, and of course paperwork. A good accountant can help you with these decisions.

What is the projected turnover The projected turnover is above all the biggest factor in deciding whether a company needs to go VAT registered. VAT registration is mostly decided by turnover. Year three turnover is worth considering, not just year one. 70,000 pounds is the current VAT threshold. If at best you will only ever turn over 20,000 pounds, VAT registration, might not be worth considering. However, if you are anywhere near the threshold, if you don’t hit it in year one, you are more than likely to hit it in year two. It makes sense in this scenario to be VAT registered from the start.

Consider your client base

The client base you deal with is an important consideration for VAT registration. Consider a lot of businesses expect to be charged VAT. They are able to claim it back and does not cost them anything. A lot can be said for a company by its turnover. So companies may not do businesses with those not VAT registered. On the reverse is the price conscious home user, who are unable to claim VAT. Becoming VAT registered can make you more expensive than those who are not VAT registered. As above with the turnover, you really don’t want to have to up your prices because you become VAT registered further down the line. Fees for accountancy

Your new company is most likely going to be short of cash and so becoming VAT registered is probably a bill that is not needed. You can perform your own VAT returns online. However the expert advice of an accountant is invaluable for a new company owner. Your account will know the rules of what you can and cannot claim back. Something that yourself will not be sure of.

Also consider what happens if you have a VAT inspection?

Good accounts are worth there weight in gold should an inspection happen. Proportions of bills charged VAT

What are your outgoings and how much can you save from being VAT registered?

You did read it correctly, you are able to save money by being VAT registered! At the current time of writing, 17.5% on top of the price of the product or service is charged in VAT. If you are not VAT registered, you can’t claim this back. But by being VAT registered you are able to claim this money back against any VAT you owe on the VAT return.Talk to an accountant My points above are just some things to look at when registering your company. The above advice should be kept in mind but it is always recommended to seek advice from an accountant when dealing with company formations.

For guidance with company formations, check out Optimum Formations, who expertise in UK company formations.