VAT can be reclaimed on most goods or services purchased from other businesses.Whether voluntary or compulsory, there are a number of benefits of being VAT registered: The advantages of voluntary VAT registration They choose to do this for various business reasons which we will discuss below.
Many small businesses with a turnover of less than the VAT registration threshold decide to become VAT registered on a voluntary basis before they are legally obliged to register for VAT. You have to be registered for VAT to be able to charge or reclaim this tax on anything you buy or sell.Ī business is legally required to register for VAT when taxable turnover (i.e., overall takings, not profit) for the previous 12 months exceeds the VAT registration threshold of £85,000 (2022/23 tax year), or if it is expected to exceed the VAT threshold in the next 30 days. Businesses that are not VAT registered cannot reclaim any of the VAT they pay.
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