Posted: 13. April 2019 by: Rupert Tennant

How to Apply for VAT

VAT is one of the most common ways for British citizens to pay their taxes. The acronym stands for Value added tax, and it’s paid on the value you’ve added to the good or service to make a profit from it. That means that it’s easy and transparent to tax since everyone pays at their point of the chain of production.

It’s a tax that has a rather high threshold, but many decide to apply for it even if they are below that threshold since there are numerous advantages to those who pay VAT.

Registering online

The easiest way to register is to do it online. There’s a web portal that’s dedicated this purpose alone, and it’s relatively easy to follow. The company needs to be registered to operate before you set it up to pay VAT and you’ll need to provide documents to that effect.

A company can appoint an agent to do this on their behalf, and they could also pay the VAT for them in the years to come. That can be an accountant, but it doesn’t have to be even that’s the simplest way to go.

Who can’t register online?

There are a few businesses that can’t register online since they are applying for special considerations together with VAT. These businesses will need to register via a special form that will be sent via the post office. It takes a bit longer to register this way.

It can’t happen if you.

  • Apply for “registration exception.”
  • Join an agricultural “flat rate scheme.”
  • Register the division of an already existing incorporated business.

That doesn’t mean that everyone will automatically be expected in these schemes and exceptions as they would be in VAT since additional rules apply for them as well.

Information to provide

The company needs to provide a set of information when they are registering for VAT. It’s clearly outlined what you need to do send so that you can prepare for it early on and finish the whole registration in one swoop.

You’ll need to provide the business name, bank statements in detail and the proof of yearly turn over which is what will qualify you for VAT in the first place. The government will then provide you with a document proving you’re in the VAT system and that can take up to 30 days, but it’s effective since the day you got approved.

When to do it?

There are two types of registration. One is mandatory, and the second is optional, you can register for the second one whenever you want to, but the first one is dependent on the turnover the business is making within a year.

If you have a turn over above £85.000 within a year, you need to apply for VAT right away. Suppose you have reason to believe that you’ll have turned over above that within a month you’ll need to apply as well. Have in mind that turn over and profits aren’t the same and that second could be much smaller than the first.

If you’re selling VAT exempt goods

There are goods and services that are exempt from VAT altogether. Those are usually the goods and services related to medicine and some services in education or those that are used by the person with a disability.

Suppose you have a turnover larger than £85.000 you’ll need to apply for VAT as well even though you won’t pay any. That means you don’t pay any VAT, but that you pay 0 percent rate on the products you sell and that are exempt from this tax.

An exception

There’s an option of applying for an exception from VAT when you meet all the possible demands and requirements for it. The only way to apply for an exception, in this case, is if your turnover sometimes goes over and sometimes under the threshold set for paying VAT.

The exception will last for 12 months, and you’ll need to provide the proof that your overall turnover is close to the line and that it’s jumping over and under it. After a year you’ll need to choose one, and if you’re that close, you should register anyway.


Applying for VAT is a fairly simple process, and it can be done almost entirely online, except for a few special cases. Those are usually about agricultural businesses. The VAT usually depends on how much you have in turnover within the year. If you have a turnover higher than 85.000 a year, the registration is mandatory.

There’s an exception for those who move above and below that threshold, and that can last for 1 year until they sort out their finances. It’s best to apply for VAT even after you’re below the threshold due to the benefits of such an approach.