How to register for VAT

First be clear about why you are registering, because it decides your dates. If you have gone over the threshold, the deadline and the effective date follow fixed rules, and our guide to the VAT registration threshold explains them with examples. If you are registering voluntarily, you are choosing to start charging VAT and filing returns, so think through the effect on your prices first.

It also helps to decide at this stage whether you want to use a VAT accounting scheme. GOV.UK says that if you want the Flat Rate Scheme, you should register for VAT and join it at the same time. Our comparison of VAT accounting schemes sets out the options.

For most sole traders, partnerships and limited companies the online route is the normal one. You sign in, work through the questions about the business and its turnover, and can save your progress and return later.

GOV.UK says you must use the paper form VAT1 in some situations, for example if you are applying for a registration exception or joining the Agricultural Flat Rate Scheme, and GOV.UK lists a few other cases, such as registering a local authority. Everyone else can normally apply online.

GOV.UK says you can appoint an accountant or agent to submit your VAT returns and deal with HMRC on your behalf, and many people ask the same person to handle the registration. For VAT, an authorised agent can discuss your VAT with HMRC and sign paper documents. You stay legally responsible for your own tax, so check the details on the application before it goes in, especially the turnover figures and the date you went over the threshold, because they set your effective date.

When your registration is processed, HMRC sends by post:

• your 9-digit VAT registration number, which you must include on all invoices you raise
• information about how to set up your business tax account
• when your first VAT return and payment are due
• confirmation of your effective date of registration

GOV.UK also says HMRC will sign up your business to Making Tax Digital for VAT unless it is exempt or you have applied for an exemption. All VAT-registered businesses have had to use Making Tax Digital for their returns since the first period starting on or after 1 April 2022, so you will need compatible software before your first return. HMRC has a search service for compatible VAT software; we do not recommend any product.

Your effective date can come before your VAT number arrives, which leaves a gap. GOV.UK says you cannot show VAT on invoices until you have the number. Instead you can increase your prices to cover the VAT you will owe, then reissue the invoices showing the VAT once the number arrives. Customers who are VAT-registered are likely to want those reissued invoices, so it helps to tell them in advance.

Keep a note of every sale from the effective date, because VAT is due on your sales from your effective date, whether or not it was shown at the time.

Set up the business tax account, make sure your software is linked, and diary the first deadline. Returns are usually sent every 3 months, and the online deadline is usually one calendar month and 7 days after the period ends, which is also the payment deadline. If you want to pay by Direct Debit, GOV.UK says to set it up at least 3 working days before you submit your return. If you later stop being eligible, for example because you stop trading, you must cancel your registration within 30 days or you may be charged a penalty. Our guide to VAT deadlines and penalties covers what happens if a return or payment is late.

This guide is general information, not tax advice. The VAT returns service page explains how accountants help with the ongoing work, and if you would like help we read every enquiry and, where we can, will put you in touch with a local accountant. You can get in touch at any stage.