To be VAT registered or not?

[MarcusUK21]

Hi Folks. I hope some of you can advise me. I am a soletrader and was not too sure about registering for VAT because my business has not started yet but realise you don’t need to register until I reach the threshold. But equally are there benefits to being VAT registered? My business is e-commerce store.any advice will be welcomed.

 

[Mark T Jones]

Potential benefits:

Reclaim VAT on purchases
Perception of size/seriousness
Prepared for growth

Potential disbenefits:

Bureaucracy/ admin
Potential hight costs b 2 c

 

[MarcusUK21]

Thanks. I guess it will be best to see how the business goes in the first few months. That may be a decision maker.

 

[paulears]

I sat down and looked at my buying and selling. I looked at the customers, the clients, the businesses vs consumers and my suppliers. I looked at a three month estimate and the answer was very clear. Register. I was at that time below the threshold so did it voluntarily. Now, with everyone having to submit VAT via software, submitting a VAT return is a doddle, but you need to be very accurate with entering your invoices. So many invoices and receipts nowadays include the VAT on the receipts, but don't include the VAT number, or show the price as £X inc VAT, when they're not even registered, but the software didn't have the VAT content removed. It's a bit of a faff to have to play detective, but that's usually only once for regular entries. If you have an accountant, ask them, but you can do the assessment yourself - choose the most appropriate one. Don't forget that for a new business there may be many start up large costs, that could work better if you are registered, but then that element drops?

 

[DontAsk]

Thanks. I guess it will be best to see how the business goes in the first few months. That may be a decision maker.

Be sure to set your prices high enough to cover the hit on margin if/when you register, unless you are certain you can raise your prices, when you register, with no loss of customers.