The VAT threshold is the volume of annual turnover at which businesses are required to register for value-added tax (VAT) . Here are some key points about the VAT threshold:
- In the UK, the current VAT registration threshold is £85,000.
- Once a businesss turnover reaches the VAT threshold, it has 30 days to register for VAT with HMRC.
- There are different thresholds for using some VAT accounting schemes, such as the Flat Rate Scheme, Cash Accounting Scheme, and Annual Accounting Scheme.
- If a businesss taxable turnover crosses the current VAT threshold, it is required to inform HMRC and register for VAT.
- There is no compulsory VAT deregistration threshold, and companies with a turnover of less than £85,000 can still be voluntarily registered for VAT.
Its important for businesses to regularly check whether their VAT taxable turnover for the last 12 months has crossed the current VAT registration threshold. If a businesss total VAT taxable turnover for the last 12 months exceeds £85,000, it must register for VAT.
