How Long Does It Take to Register for VAT in the UK?

Some businesses operating in the UK must register for and charge value-added tax (VAT) to their customers. There are different rates that you charge depending on the types of goods and services that you offer. But, the good news is that there can be some VAT relief for certain business purchases.

With VAT, you charge your customers VAT on sales and you also get charged as a customer. Then, you pay the difference to HMRC. But there are certain things to know and understand when it comes to the VAT registration process. There could be some different implications depending on the products and services you offer or your industry.

It can also be a little confusing going through the registration process for your VAT number. Here’s what you need to know about VAT and how long it takes to register for VAT in the UK.

Here’s What We’ll Cover:

What Is VAT?

How Long Does It Take to Register for VAT?

When Do You Have to Register for VAT?

Key Takeaways

What Is VAT?

VAT is a type of consumption tax that gets collected by a business on behalf of HMRC. You charge a VAT rate on goods and services that you purchase and that customers buy. There are three different VAT rates for goods and services.

The first is the standard rate, which gets charged at 20%. The standard rate is applied to most goods and services.

The second is the reduced rate, which gets charged at 5%. The reduced rate depends on the circumstances of the sale. Things like domestic power, children’s car seats and sanitary products are charged at a reduced rate. However, mobility aids, for example, are only subject to the reduced rate if they’re installed in a home of someone over 60 years of age.

And the third is the zero rate of VAT, which gets charged at 0%. Some examples of zero-rated items are children’s clothes and shoes, motorcycle helmets and newspapers and books.

How Long Does It Take to Register for VAT?

The majority of businesses can register for VAT online. And that includes partnerships, limited companies or a group of companies registering under a single VAT number. When you do it online, you will create a VAT online account where you will submit VAT returns to HMRC. All you need is your email address and a password.

As a business owner, you can also use an agent or appoint an accountant to help submit your VAT returns and communicate with HMRC.

Once you have completed the VAT registration, you should receive your VAT certificate within 30 working days. However, it could take longer depending on some circumstances. When it’s sent to you, it can get sent either to your VAT online account or by post.

You will need to provide business details such as your annual turnover, bank details and any other business activity. And an important thing to remember is that the date that you register becomes your effective date of registration.

This means that you must pay HMRC any VAT that’s due starting from this date.

When Do You Have to Register for VAT?

There are certain VAT obligations and VAT liabilities. You must register your business for VAT as soon as your annual taxable turnover exceeds the VAT registration threshold, which is £85,000. After this, you need to charge UK VAT rates on the goods and services that you sell. As well as paying tax on your business purchases.

You can still register for VAT even if you haven’t reached the £85,000 annual taxable turnover. It just depends on what will work best for your business moving forward.

Key Takeaways

As soon as your business exceeds an annual taxable turnover of £85,000 you will need to register for VAT in the UK. Make sure that you check the HMRC website for a full breakdown of VAT and the different rates that can get charged. They also provide a further breakdown of which products and services fall under the reduced rate of VAT or the zero rate of VAT.

You can complete the registration online or with the help of an accountant. Once it’s completed you will receive your VAT registration certificate within 30 days. After the arrival of your VAT number, head back into your VAT online account, input your number and change the setting to Registered.

If your application is taking longer than expected it could be due to HMRC needing some additional information. If that’s the case, they will usually contact you to ask for some more details to help finish the application process.

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