Why do you need to register for VAT

If your business’s turnover exceeds £85,000 in a 12-month period, you are legally required to register with HMRC for VAT. It’s important to note that this is based on turnover, not profit. Turnover is the total income of your business (your net sales figure), whereas profit is your earnings that are left over after expenses have been deducted. If your turnover is below the threshold, you can voluntarily register for VAT. One of the benefits of being VAT registered is that you can reclaim any VAT paid on your business expenses.