VAT-Registration-Guide

Many small business owners worry when approaching the VAT threshold that they will lose 20% of their income or that adding VAT for residential customers will make them too expensive to compete with those not registered.

How Vat Works:

Sole traders and Limited Companies with a turnover over £90k are obliged to register for VAT and must submit a quarterly VAT return.

Standard VAT rate: 20%

  • Your B2B Customers who are VAT-registered can reclaim the VAT that they pay you, so your pricing does not affect them.

  • Residential Customers are not VAT registered so you can either:

    a. Charge VAT on top of your price (customer pays extra)
    b. Absorb the VAT yourself (keep residential pricing the same)