VAT registration is mandatory once your taxable turnover exceeds £90,000 in any rolling 12-month period. You must also register if you expect to exceed this threshold in the next 30 days alone.
However, some businesses choose to register voluntarily before reaching the threshold. This can be beneficial if you primarily sell to other VAT-registered businesses, as you can reclaim VAT on your purchases.
On the other hand, if your customers are mainly individuals or small businesses that cannot reclaim VAT, voluntary registration means you'll need to charge VAT on your prices — which could make you less competitive.
Once registered, you'll need to submit VAT returns — usually quarterly — and keep detailed records of all VAT charged and paid. MTD for VAT already requires digital record-keeping and submission for all VAT-registered businesses.
If you're approaching the threshold or considering voluntary registration, it's worth discussing the implications with an accountant who can help you make the right decision for your business.
If you'd like a second opinion on whether to register, our accounts and compliance support can talk you through the implications for your business.