VAT Registration Explained – A Guide for Local Shirley Startups

Are you excited about starting a new business? If yes, you can encounter many challenges that can be legal or financial constraints. And a major challenge could be registering for VAT especially in areas like Shirley. Hence, it becomes important to understand how this system works and when a startup in Shirley should register for VAT. All these issues can be easily resolved with the help of an expert accountant in Shirley as they master in how this system works and how to stay fully compliant with HMRC requirements. In this blog, we will discuss how to do VAT registration for startups, its advantages and how firms like Integrity Accountancy services can help you successfully cover this.

What is VAT?

The government imposes some fine if you are selling goods and services called value added tax( VAT). So, if any company is registering for the same, they should pay some charges and submit it in the form of regular returns to HMRC. Currently, the UK taxes 20% which is the standard rate and is reduced up to 5% and 0% for specific goods and services. It is not the tax that is imposed on business but it is collected by authorities such as HMRC.

Do Shirley Startups Need to Register for VAT?

There are several factors that determine whether you pay for these factors or not.

1. Compulsory VAT Registration
The first factor that determines the VAT threshold is the turnover of the company. If the business exceeds over £90,000 then you are taxable as per the 12 month basis not on the basis of the financial year.

2. Voluntary VAT Registration
The second factor is to choose the registration voluntarily. You can get added benefits for this such as you can reclaim the VAT on your expenses. You can also work with other VAT registered businesses and boost your business credibility.

Key Steps for VAT Registration

Step 1: Check Your Turnover
For registering, you can keep the tally of the expenses and if the threshold is increased, you can register early to avoid any penalties.

Step 2: Choose a VAT Scheme
Second, you can register for VAT accounting schemes such as standard ones which are done once in a quarter. Then, a flat rate scheme that is done for small businesses and for annual accounting schemes that is done yearly. Based on these schemes, you can pick the right one according to the time and money.

Step 3: Register Online
Then, you can register your business online on the HMRC website by giving your contact details, bank account information and nature of your business services and goods. All the process is concluded within 10 to 14 working days.

What Happens After VAT Registration?

After completing the VAT registration, you will get the certificate and will be responsible for all the VAT invoices. Lastly, you can submit for VAT registration for returns and payments. For registration of your business follow the date as they will be:

• Charged for the VAT on your sales of goods and services.
• Then, you need to show VAT amounts separately on invoices and file your taxes on time.
• Paying the taxes on time via HMRC can help you avoid any penalties.

Benefits of VAT Registration for Startups

There are various advantages of VAT registration for startups including:

• Professional image – you can improve your clientele and reputation through VAT registration. Many suppliers will willingly work with you because of this reason and registration will also make you an established enterprise as well.
• VAT reclaims – registration in early phase can make you eligible for business purchases like software, marketing services, office supplies and equipment also.
• Growth planning – registration will also help you grow your connection and you will be able to handle larger deals and clients as well.
• Better cash flow management – another benefit of cash flow management is to reclaim timing and structure payments that can optimise cash flow.

How Integrity Accountancy Services Can Help

You can hire accountancy companies like Integrity Accountancy that helps start-ups in Shirley. They can be helpful in registration of VAT and will help you manage the financial burden of your business. From guiding you through the VAT registration, managing the application to finding the right scheme based on your business model, the experts will manage everything, so that you remain stress free during audits.

Final Thoughts

Hence, in this blog, we got to understand why registration of VAT returns is a major requirement and for a new startup it doesn’t have to be overwhelming. This registration offers various benefits for your business. You can either register yourself voluntarily or begin the journey when you reach the threshold. But, if you are still confused then hiring an expert accountant firm such as Integrity Accountancy can be a better option. By working with an expert, you not only comply with HMRC requirements but also grow your dream business with the right clientele.