What happens when you cross the VAT threshold?

If your turnover goes over the VAT threshold, but you know this is only a one-off event then you can ask HMRC for a VAT exception. This needs to be done in writing within 30 days of the date you went over and you must provide evidence that you will not go over again within the next 12 months.

What is the threshold for a company to pay VAT?

£85,000
You must register for VAT if your VAT taxable turnover goes over £85,000 (the ‘threshold’), or you know that it will. Your VAT taxable turnover is the total of everything sold that is not VAT exempt. You can also register voluntarily.

Once the date of exceeding threshold had been established the next job was to register for VAT. HMRC may investigate and if they find you went over prior to the date you are registering they will want the VAT paid and there may be hefty fines. Once registered, the next stage is to start submitting all the back VAT.

How does becoming a limited company reset the VAT threshold?

It shows that IF the transferor (the sole trader) is already a taxable person prior to the TOGC then the transferee (the new limited company) is liable to be registered. In this situation, becoming a limited company DOES NOT reset the VAT threshold and the Limited Company must be VAT registered straight away.

What are the thresholds for VAT in the UK?

The thresholds for registering for VAT or joining a VAT accounting scheme from 1 April 2017. There are different thresholds for other schemes like the VAT Retail schemes. The threshold is based on your VAT taxable turnover – the total value of everything you sell or supply that isn’t VAT exempt.

When do you have to register VAT with HMRC?

VAT taxable turnover is the total value of everything you sell that is not exempt from VAT. You must register for VAT with HM Revenue and Customs (HMRC) if it goes over the current registration threshold in a rolling 12-month period.

Do you need to include VAT exempt items in Rolling turnover?

You do not need to include anything that is VAT exempt. You should check your rolling turnover regularly if you’re close to going over the threshold. Check historical information about VAT thresholds if you think you should have been registered in previous tax years.