The term VAT Threshold or VAT registration threshold is used for the total amount of money you can easily earn before VAT registration becomes eligible to you. In other words, VAT Threshold directly refers to the total amount of money that you must earn before VAT registration; otherwise, you won’t be eligible or bound to register for VAT in the UK or any other country that follows the VAT Taxation system.
When Should You Register for VAT?
There are several terms and conditions that you must follow before VAT registration.
The total amount of tax over that you expect to reach within the next 30 days or you have earned more than the total VAT Thresholds during the 12 months.
However, you need to check your VAT taxable turnover carefully for the last 12 months; otherwise,, any mistake in the calculation will make problems for you during the registration process.
What is the Current UK VAT Registration Threshold?
According to the most recent updates, the current VAT registration threshold for 2021 is 85,000 UK pounds. However, we will not be responsible for any change in the current VAT Registration Threshold Rate because it keeps changing from time to time. For your additional safety, you must check the current VAT registration limit rate from the UK Taxation Department’s official website to avoid any errors or mistakes in calculations.
What Happens After Reaching VAT Registration Threshold?
Once you have successfully reached the current VAT limit, there will be 30 days limit for you to register VAT for your business; otherwise, you will be charged an extra penalty fee.
However, you must keep in mind these are the following most important points after reaching the VAT Registration Threshold.
- You will be able to charge VAT on the goods and services after reaching the VAT Threshold.
- You will be able to pay VAT on the goods and services you have bought for your business.
- You will have to submit the annual VAT Return without any delay.
- You will be bound to keep all the VAT records and VAT account in place.
Rules for Reaching VAT Threshold Temporarily
There are many rules and regulations that you must full fill before VAT Registration becomes compulsory for you. Remember, you can easily inform the HMRC Department in the UK with proof of your business’s VAT limit is temporary as you will be asked to give the 12-month statement. If you keep everything transparent, then there will be no need to hide anything from the HMRC Department as they will facilitate you more in this regard.