Andrew Needham looks at the consequences of registering for VAT late.
A business should register for VAT when its taxable turnover exceeds £85,000 per annum. The VAT registration limit is based on a rolling 12 months, so the business should check its previous 12 months taxable turnover at the end of each month.
Any exempt income (e.g. insurance commissions, interest, residential rental income, etc.) are ignored when calculating the turnover for VAT registration purposes.
Missing the boat
Many businesses don’t realise that they have to do this and either don’t monitor their turnover at all or just do it when they get their annual account prepared and expect their accountants to tell them if they need to register for VAT.
In some cases, HMRC’s view on the liability of supplies
