The Chancellor, Jeremy Hunt, delivered his second Spring Budget on 6 March 2024. An important update for businesses in the UK was announced regarding the Value Added Tax (VAT) registration threshold. The threshold, which determines when a business must register for VAT, will increase from £85,000 to £90,000 from 1 April 2024. This adjustment will have implications for many businesses across the country, and it is crucial for entrepreneurs and business owners to understand the changes and how they may affect their operations.

The VAT registration threshold is the total annual turnover at which a business is required to register for VAT and charge VAT on its goods and services. The increase from £85,000 to £90,000 means that businesses with an annual turnover below £90,000 will not be required to register for VAT, thus reducing the administrative burden for smaller businesses.

For businesses that are currently close to the previous threshold of £85,000, this change may provide some breathing room, allowing them to grow their revenue without immediately having to register for VAT. This can be particularly beneficial for start-ups and small businesses that are still in the early stages of development.

However, businesses approaching or exceeding the new threshold of £90,000 will need to prepare for VAT registration and ensure that they comply with all the relevant regulations. Registering for VAT involves keeping accurate records of sales and purchases, charging the correct amount of VAT to customers, and submitting VAT returns to HM Revenue & Customs (HMRC) on time.

It is important for businesses to stay informed about their VAT obligations and monitor their turnover regularly to determine when they need to register for VAT. Failure to comply with VAT regulations can result in penalties and fines, which can have serious consequences for a business’s finances.

If you require assistance with your VAT Returns or registering for VAT, our team of accountants can assist you in the following areas:

• VAT Registration – We can advise you if you need to or it would be beneficial for you to register.
• Our accountants would be able to complete the VAT registration forms and formalities.
• Advising on the best VAT schemes to use suitable to your business.
• Completion of VAT Returns or training on how to complete these through a commercial software.
• Support and guidance with the Domestic Reverse Charge if this impacts your business.
• VAT planning
• Dealing with any disputes that can arise with H M Revenue & Customs
• We complete VAT returns in good time to ensure you avoid any penalties.

Get in touch with S Smith & Co Accountants in Scunthorpe today on Scunthorpe 01724 848343, for a free no obligation quote for our experienced team to ensure you are VAT compliant.