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For a successful business, you need a viable business idea, the skills to make it work and the funding. Discover whether your idea has what it takes.

Forming your business correctly is essential to ensure you are protected and you comply with the rules. Learn how to set up your business.

It is likely you will need funding to start your business unless you have your own money. Discover some of the main sources of start up funding.

Businesses and individuals must account for and pay various taxes. Understand your tax obligations and how to file, account and pay any taxes you owe.

Businesses are required to comply with a wide range of business laws. We introduce the main rules and regulations you must comply with.

Learn why business planning is an essential exercise if your business is to start and grow successfully, attract funding or target new markets.

Marketing matters. It drives sales and helps promote your brand and products. Discover how to market your business and reach your target customers.

Some businesses need a high street location whilst others can be run from home. Understand the key factors from cost to location, size to security.

Your employees can your biggest asset. They can also be your biggest challenge. We explain how to recruitment and manage staff successfully.

It is likely your business could not function without some form of IT. Learn how to specify, buy, maintain and secure your business IT.

Few businesses manage the leap from start up to high-growth business. Learn what it takes to scale up and take your business to the next level.

VAT registration

If you register for VAT with HM Revenue & Customs (HMRC), you must charge VAT on any goods and services you sell that are subject to VAT. VAT registration also allows you to reclaim some or all of the VAT you pay on purchases

VAT registration is compulsory for all types of business once you reach the VAT threshold or expect to exceed the VAT threshold. But even if your turnover is below the VAT threshold, there can be advantages to voluntary VAT registration.

The VAT registration threshold

The VAT threshold tends to be set each year in the Budget. However, the VAT registration threshold has remained unchanged at £85,000 since 1 April 2017.

VAT registration is compulsory if your UK turnover of taxable goods and services (any sales that are not exempt from VAT) over the previous 12 months goes over the VAT threshold. VAT registration is also compulsory if you expect your taxable turnover to exceed the VAT threshold in the next 30 days alone.

However, you can ask HMRC for exemption from VAT registration if you can show that your turnover has only temporarily risen above the VAT threshold, and that it will fall back below the VAT deregistration threshold (£83,000 from 1 April 2017). If you register, you can deregister later if you can show HMRC that your taxable turnover will fall below the threshold.

There are additional VAT registration requirements for importers in Northern Ireland and businesses making 'distance sales' into Northern Ireland. There are also special rules for businesses making distance sales of excise goods (such as tobacco and alcohol) into the UK.

VAT registration and accounting for VAT

It can take HMRC several weeks to complete VAT registration and issue you with a VAT registration number. But you must account for VAT from the date when VAT registration was required (eg the date you exceeded the VAT threshold).

That means you will need to keep proper VAT records. You also need to account for and pay VAT through VAT returns starting from the initial date of VAT registration. This includes paying HMRC the VAT due that you have charged on your sales (output VAT), and reclaiming the VAT you have paid on business supplies (input VAT).

However, you are not allowed to charge VAT or issue VAT invoices until you have received your VAT registration number. Instead, you need to increase your prices by an amount equivalent to the VAT you will be charging, and explain to your customers what is happening. Once you receive your VAT registration number, you can reissue proper VAT invoices which now do include VAT separately. In this way, neither you nor your customers will lose out.

Voluntary VAT registration and VAT planning

Voluntary VAT registration may be worth considering, even if your taxable turnover is below the VAT threshold.

For example, if you sell zero-rated goods but purchase standard-rated supplies, VAT registration will allow you to reclaim the VAT you are paying. Even if you sell standard-rated goods, VAT registration can be advantageous if your customers are other VAT-registered businesses that can reclaim the VAT you must charge after VAT registration.

It's worth noting that you may be able to reclaim VAT you have spent on supplies purchased before VAT registration. This can include goods bought up to four years previously and services up to six months ago. You must have proper VAT records and meet other requirements. You should take advice if you think you may be able to take advantage of this (eg if you want to reclaim VAT costs incurred while setting up a new business).

Finally, you should be aware that you cannot avoid VAT registration by artificially splitting your business into smaller businesses, each with a taxable turnover below the VAT threshold. Conversely, if you acquire a VAT-registered business and this takes your combined taxable turnover in the previous 12 months over the VAT threshold, VAT registration will be required. If you are involved in running several businesses or plan to acquire another business, you should take advice on the VAT implications.

Deregister for VAT

You must cancel your registration if you stop trading or join a VAT group or become ineligible for any other reason. You can, at any time, voluntarily cancel your registration if your turnover falls below the threshold of £83,000. Visit the GOV.UK for information on when you can deregister for VAT.

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