Downsides to VAT
Do you like admin? We hope so because being VAT registered requires extra administrative work. This includes keeping accurate records of all VATable transactions, submitting regular VAT returns, and paying VAT owed to HMRC on time. If you’re a small business, this additional admin may outweigh the benefits of being a VAT registered company. However, if your business is growing quickly and you expect to exceed the VAT threshold soon, you should start considering registering in advance as this will help avoid any issues down the line.
Now that you’re familiar with the term VAT and understand what it is, we’ll move on to looking at what else you may need to register in your business. In our next module we’ll cover when you need to register with HMRC.