It’s not necessary to register for VAT unless your business hits the VAT turnover threshold. At the time of writing, that’s £85,000.
A couple of things to note:
- The threshold is based on turnover not profit
- You don’t need to be a limited company: sole traders can register, too
- You shouldn’t charge VAT on services unless you’re VAT-registered
You can choose to register voluntarily if your turnover is below this limit. There are situations where this may be useful, but it’s certainly a topic to cover with your accountant.
There are more details about registration on the GOV.UK website.
Tax, Pensions & Accounting sponsor
Our friends at Penfold provide the self-employed (whether you’re a freelancer or Limited Company) with a completely digital, FSCS-protected & FCA-regulated pension:
- It’s simple to use & completely flexible – pause your contributions or make one-off top-ups any time you like.
- HMRC adds £25 for every £100 you pay in...or more for higher earners!
- LTD companies can deduct contributions from their tax bill
- Work Notes readers get £25 in their pension by using the referral link (or referral code: Work Notes)!
Pensions are a long term investment, and your capital is at risk.