Most business people know that if they are in business making taxable supplies, and if their taxable turnover goes over the current limit of £56,000 (over the last 12 months) they should be registered for VAT. There is a requirement to notify the VAT Business Advice Centre for your area within 30 days. Remember that there is another less commonly known test. If your taxable supplies in the next 30 days will exceed £56,000 then you must register at that point.
After you have registered you are known as a “Registered Person”. It is the “person”, and not the business who is registered for VAT and each registration covers all the business activities of the registered person. The person to be registered can be, for example, a sole trader, a partnership, or a limited company. It is very important therefore to consider all business activities in which you as a sole trader, or indeed you with other business partners, may engage. The turnover of all businesses are added together to see whether the taxable turnover limits noted above have been exceeded. If for example a husband and wife in a business partnership operate a shop, the partnership (the registered person) will almost certainly account for VAT. If the husband and wife commence a separate holiday accommodation letting business they would be required to charge VAT to customers, because the same “Registered Person” is operating this separate business.
If you find yourself in circumstances such as those outlined above, we suggest that you contact us so that we can review the situation together.