There are benefits to a voluntary VAT registration.

You are able to charge VAT on your sales and claim back the VAT on your expenses.

  • This is beneficial if you operate in a business to business environment and all your customers are VAT registered. They recover the VAT you charge (outputs) and you can recover the VAT (inputs) on your expenses.
  • If you deal with consumers who are not VAT registered this can make you more expensive than your non-VAT registered competitor.
  • If you sell zero-rated items and buy standard-rated items you would receive a VAT refund from HMRC
  • if you have not yet sold anything or don’t sell anything during a VAT accounting period, you may still be able to claim VAT back on your purchases

If you’re thinking about registering voluntarily, you might want to check the rules for reclaiming VAT on purchases made before registration since it is often possible to reclaim some of the VAT you are charged on goods or services that you use to set up your business.


Can I backdate my VAT registration?

You can apply to backdate your voluntary VAT registration by up to four years. You will have to account for VAT on any VAT taxable supplies you’ve made after your chosen date, and you won’t be able to reclaim any VAT on your purchases unless you have the right evidence, and meet the other conditions for reclaiming VAT.


Responsibilities of voluntary registration

If you decide to voluntarily register for VAT, you have exactly the same responsibilities as someone who must register. You must keep all required VAT records and issue VAT invoices. You also have to complete and submit a VAT Return at regular intervals, along with your payment if one is due.


Do you want to know more?

If you think anything covered in this blog may be relevant to you please get in touch. We’d love to help you.