Welcome to Simply-Docs

VAT, Tax and National Insurance Registration

Registering for VAT, Tax and National Insurance

VAT 

(VAT) Value Added Tax is a tax that is charged on most sales of goods and services in the UK. If your business is registered for VAT, you will have to charge VAT to your customers on top of the price you set for selling them your goods or services (unless, for certain goods or services, VAT is not chargeable).

However, you only have to register your business for VAT if your annual taxable sales are over a limit set by HMRC from time to time. (As of 1st January 2021, that limit was £85,000.) It is possible to register voluntarily although your sales are below that level (unless all of your sales are exempt). This can enable you to improve your cash flow by claiming back from HMRC some VAT that you pay to your suppliers. However, it can be a disadvantage where some of your customers are not themselves VAT registered: they will not be able to claim back the VAT that you charge them, thus in effect increasing the total (VAT inclusive) price that you have to charge them.

VAT is a complex area and you should take advice from your accountant about it.

Registering for Tax and National Insurance

If you start up your business as a sole trader, you should register with HMRC as soon as possible after you start trading, and, to avoid a penalty for late registration, no later than by 5 October following the end of the tax year in which you started self-employment at the latest. You will need to have your National Insurance (NI) number to do so. You will be contacted by HMRC soon after 5 April asking you to complete a tax return. You need to check what NI you will have to pay and when you have to start paying it. You should keep detailed accounting records so that your accountant can compile accounts for tax purposes and advise you as to how much tax you will have to pay and when it will be due.

    Simply-4-Business Ltd Registered in England and Wales No. 4868909 Unit 100, Parkway House, Sheen Lane, London SW14 8LS

    Top