HMRC launches VAT Registration Estimator

This month HM Revenue and Customs (HMRC) announced that it has introduced a digital tool designed to help businesses assess the potential impact of VAT registration.

The VAT Registration Estimator was developed in response to feedback from small businesses, which indicated that an online tool would be useful for understanding when their turnover might necessitate VAT registration and how it could affect their profits.

Businesses must register for VAT if:

• Their total VAT taxable turnover for the previous 12 months exceeds £90,000—the current VAT threshold, which was £85,000 until 31 March 2024.

• They anticipate their turnover will surpass the £90,000 VAT threshold in the next 30 days.

• They are an overseas business supplying goods or services to the UK (or expect to in the next 30 days), regardless of VAT taxable turnover.

Once VAT-registered, a business must charge VAT on eligible sales and can typically reclaim it on eligible purchases. Approximately 300,000 new VAT registrations occur each year.

The estimator is a valuable tool for any business, providing insights into the implications of VAT registration and linking to additional information on the registration process. It’s also useful for businesses operating below the threshold and considering voluntary registration.

The VAT Registration Estimator was developed with input from small businesses and trade representatives, who tested the tool and provided feedback before its launch.

Try the VAT Registration Estimator tool

Source: Gov.uk