Posted: 28. April 2019 by: Rupert Tennant

How to Apply for VAT

VAT is a tax paid by most UK businesses that work in retail. That’s the case because the tax is simple to understand and to calculate and it provides you with numerous benefits and refunds if you’re in the system for it.

It’s a tax you need to apply for. This could be done on your own accord because you want to enjoy the benefits that come with it, or it can be mandatory if your business has met all the conditions for it.

Here’s how:


You can register for VAT online. This can also be done via a paper form, but the government strongly encourages you to use the online portal to do, since most of the process will be done digitally for now on. It’s also much faster than sending the return via mail.

You could also hire someone to register the company for you. It’s often done by an accountant, but it can be done by a lawyer just as well. If the company is a part of a group, the whole group only gets one registration number, and it represents the whole with HMRC.


There are some who are exempt from registering online. This depends on the type of the VAT refund scheme they are in. Some of these schemes require you to register via a complicated written form. The whole VAT process is getting digitized at the moment, with the making VAT digital initiative, and this will probably change soon as well.

For the most part, this will affect those who apply for the Agricultural Flat Rate Scheme, but it also affects those who apply for an exemption because their turn over goes above and beyond the threshold during the year.

When to do that?

There are a few rules as to when you can and need to apply. If your company has a turnover of over £85.000 within a year, you need to apply when that happens or a month before you notice that it might happen.

The same goes if you have such a turnover, but sell the goods and services that are exempt from the tax. That means that you’ll pay a zero percent rate. It’s different from not paying any tax at all. You’ll need to keep the records and to send the returns as you otherwise would, but you wouldn’t pay any tax.


Registering for VAT is based on your turnover. It’s not the same as the profit you make; the turnover could be £85.000 which when you need to register even when your profits are much lower than that. The turnover is the value of everything you sell within a year. When you deduct the investments, you get the profits for that year, but VAT registration doesn’t have anything to do with that.

This should include the bartered trades you’ve made regardless of the value of your part of the trade, as well as the reverse charges you’ve made.

Purchases before registration

Many apply for VAT because they get refunds on the purchases they’ve made for the purpose of running and setting up a company. These cover the whole amount of VAT, but only if the company itself is in the VAT system. That’s why many decide to join even if they are below the threshold.

If these purchases have been made in accordance with the rules about the refund, but before you’ve become a VAT paying business, you are still eligible for the refund.  The cutoff date is 4 years for goods and 6 months for services.


When something happens with your personal data, you need to inform HMRC because they are saving your personal information and use them for a variety of tax-related tasks. When you change your business address, you need to make sure that HMRC knows about it.

When your company director is changed, you’ll also have to inform the government about that matter. The same goes if you go below the threshold or change the services you’re offering so that your tax rate changes based on that. All of these need to be done rather quickly, there are deadlines, but it’s never more than 30 days.


Applying for VAT is a simple process. It can be done online or via a paper form (even though some schemes need to be used only after you’ve sent a paper form, these are mostly in agriculture). It needs to happen if you have a turnover of over £85.000, but you can apply even if you don’t.

This is done because when you’re a VAT paying business, you get refunds on the VAT you paid for the products needed for running a company. It applies to the period of 4 years before you registered for VAT.

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