Since April 2017, the VAT registration threshold has been frozen at £85,000. It will remain at that level until April 2026. The Chancellor pointed out that the UK's VAT registration level is more than twice as high as the average in OECD and EU countries, therefore expect it to be reduced in the future. If businesses raise their prices to keep up with inflation, which is currently running at over 11%, the VAT threshold freeze would force many more into mandatory VAT registration.
Once a company registers for VAT, it is required to keep digital records and file VAT returns using software that is compatible with Making Tax Digital (MTD), unless the company owner can demonstrate that they are digitally excluded.
The new VAT registration process has seen some technical issues, and it can take several weeks to get a new VAT number. Once your annual turnover has exceeded £85,000 or is projected to do so in the next 30 days, you must take immediate action to register for VAT. Late registration carries severe consequences. We can assist you with MTD compliance and VAT registration.