VAT registration

[Jimwatson]

Hi all, new member here with a easy question. Im a complete novice, you will realize after reading.

If as a sole trader my turnover reached the threshold to become Ltd, does this go hand in hand with VAT registration. In other words if my turnover reached the threshold would I HAVE TO go VAT registered ?

Thanks

 

[StevensOnln1]

There is no threshold to become limited. If you reach the VAT registration threshold you will be required to register for VAT within 30 days of the month, with your registration starting from the 1st day of the nex calendar month. I.e. if you reach the VAT registration threshold during August you would register during September with your VAT registration beginning on 1st October.

 

[Jimwatson]

Okay thankyou

 

[Matthew Nathan Hargreaves]

answered perfectly Steven, couldn't put it better myself!

 

[HFE Signs]

Becoming Ltd has no bearing on your financials, however vat does.

 

[IQ Webz Ltd]

There is only threshold for VAT registration.

You can run your business as solo trader, as long as you want (however kind a risky)

 

[Jeremiah@RHJ Accountants]

This may be the point where you need professional advice from your accountant and if you do not have one speak to one now.

I have seen too many people get this wrong and end up with big fines for late VAT registration.

Also depending on your industry the flat rate scheme of VAT may benefit you.

 

[STDFR33]

If you are a sole trader, and incorporation is something you are thinking about, there is an opportunity to delay VAT registration (should it be beneficial to do so).

 

[Talay]

I think the question is asking is whether he can run £80k (under VAT threshold) as self employed and then another £80k as a Ltd before having to register for VAT.

It is my understanding that this is possible but I would ask my accountant.

 

[IQ Webz Ltd]

I think the question is asking is whether he can run £80k (under VAT threshold) as self employed and then another £80k as a Ltd before having to register for VAT.

It is my understanding that this is possible but I would ask my accountant.

If that would be a brand new Ltd company instead of "upgraded" solo trader, then I guess yes. Each Limited company is a entirely new legal entity.

I guess it is a rule of thumb, if he would open up a new ltd company, with new name, bank accounts, without old customer, then I guess he can run it up to a threshold.

Easiest way to find out, is to call HMRC, or use one of their webinars, you can ask questions about i.e. VAT and their team will respond with some good answers or tips.

 

[STDFR33]

If that would be a brand new Ltd company instead of "upgraded" solo trader, then I guess yes. Each Limited company is a entirely new legal entity.

I guess it is a rule of thumb, if he would open up a new ltd company, with new name, bank accounts, without old customer, then I guess he can run it up to a threshold.

Easiest way to find out, is to call HMRC, or use one of their webinars, you can ask questions about i.e. VAT and their team will respond with some good answers or tips.

If you transfer the trade from a sole trader to a company before becoming vat registered (or breaching the turnover limit), then the turnover threshold on the company starts at £0.