VAT Registration: A Guide for Stoke-on-Trent Businesses

When must you register for VAT?

You must register for VAT if your VAT taxable turnover exceeds GBP 90,000 in any rolling 12 month period. This is the compulsory registration threshold for 2025. You have 30 days from the end of the month when you exceeded the threshold to notify HMRC.

You must also register if you expect to exceed GBP 90,000 in the next 30 days alone. This forward look provision catches businesses with large contracts or seasonal spikes.

• Current threshold is GBP 90,000 rolling turnover
• Monitor your 12 month rolling total monthly
• 30 days to register after exceeding the threshold
• Late registration triggers backdated VAT liability

Voluntary VAT registration

Businesses below the threshold can register voluntarily. This makes sense when you buy significant VAT able supplies, sell mainly to VAT registered businesses, or want to appear more established.

Voluntary registration lets you reclaim VAT on purchases from day one. If your customers are VAT registered themselves, adding VAT to your invoices costs them nothing because they reclaim it. The main downside is increased administration and the need to charge VAT to non registered customers.

How to register

Most businesses register online through the HMRC VAT registration service. You will need your business details, bank account information, and an estimate of VAT taxable turnover. The process takes around 30 minutes and HMRC typically issues your VAT number within two weeks.

Some registrations require paper applications, including businesses without a National Insurance number or those applying for certain VAT schemes. An accountant can handle the registration and ensure you choose the right schemes from the start.

Choosing a VAT scheme

Several VAT schemes simplify accounting or reduce liability. The Flat Rate Scheme suits businesses with low costs, applying a fixed percentage to gross turnover instead of tracking input VAT. The Cash Accounting Scheme helps cash flow by accounting for VAT when money changes hands rather than when invoices are issued.

The Annual Accounting Scheme reduces returns to one per year with interim payments. Each scheme has eligibility criteria and trade offs. We help Staffordshire businesses choose the scheme that minimises admin and tax.

• Flat Rate Scheme applies a fixed percentage to turnover
• Cash Accounting helps businesses with slow paying customers
• Annual Accounting reduces returns to once per year
• Standard VAT accounting offers maximum input recovery

VAT rates explained

The UK has three VAT rates. Standard rate at 20 percent applies to most goods and services. Reduced rate at 5 percent covers items like home energy, child car seats, and some energy saving installations. Zero rate at 0 percent applies to food, books, children's clothing, and exports.

Some supplies are exempt from VAT entirely, including insurance, education, and healthcare. Exempt businesses cannot reclaim input VAT, which affects profitability calculations for certain sectors.

Making Tax Digital for VAT

All VAT registered businesses must now comply with Making Tax Digital. This means keeping digital records and submitting returns through compatible software. Spreadsheets alone no longer qualify unless linked to bridging software.

Popular MTD compatible software includes Xero, QuickBooks, Sage, and FreeAgent. We help businesses select and implement software that fits their workflows and connects to their bank feeds.

VAT returns and payments

Most businesses submit quarterly VAT returns. Each return covers a three month period and is due one month and seven days after the period ends. Payments must reach HMRC by the same deadline.

Late returns and payments trigger penalties and interest. HMRC operates a points based penalty system where repeated late submissions result in fixed penalties. Keeping on top of deadlines protects your cash flow and compliance record.

Common VAT mistakes

We regularly correct VAT errors for new clients. Common issues include claiming VAT on non allowable items like entertainment, applying the wrong rate to supplies, and failing to account for the reverse charge on construction services.

Record keeping gaps also cause problems during HMRC inspections. Every VAT claim needs a valid invoice with the supplier's VAT number, your business name, and a clear description of the supply.

• Keep valid VAT invoices for all input claims
• Apply correct rates especially for mixed supplies
• Account for reverse charge VAT where required
• Reconcile returns to accounting records before submission

Key takeaways

• Register within 30 days of exceeding GBP 90,000 turnover
• Consider voluntary registration if you have high VAT able costs
• Choose a VAT scheme that suits your business model
• Use MTD compatible software for record keeping
• Submit returns and payments on time to avoid penalties

How we can help you

We specialise in:

• VAT registration support
• VAT scheme selection advice
• Quarterly VAT return preparation
• MTD software implementation
• VAT health checks and error correction

Approaching the VAT threshold? Contact K&R Accountants in Stoke-on-Trent for a free consultation. We make VAT registration straightforward.