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Do I need to register my ltd company for VAT?
Posted Nov 30, 2010
VAT is a tax charged on most goods and services in the UK - the 'standard' rate is currently 20% (from 4th January 2011).
If your business turnover exceeds the current VAT threshold level (currently £73,000 from 1st April 2011), then your company must register for VAT.
Your business turnover means the total sum invoiced by your company, not just the profit.
Many limited company contractors who may not necessarily breach this threshold still choose to register for VAT, as there may be business benefits in doing so.
You may also be better off by joining the Flat Rate VAT Scheme instead of registering for the standard VAT regime.
You should always check with your contractor accountant before deciding upon the right VAT scheme to join.
Further Information
- Try our overview of VAT for the basics on Value Added Tax, and more information on when to register for VAT.
- Guide to the Flat Rate VAT Scheme, which may be more beneficial to your company (check with your accountant).
- Summary of the main accounting methods for VAT
- HMRC's VAT microsite.
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