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Value Added Tax (VAT) is a consumption-based tax placed on certain goods and services and must be paid by companies exceeding a certain annual turnover threshold in the UK. If your company earns over this threshold, it has to register for VAT.

Once you have registered, you can claim VAT you paid back on your business expenses when you submit a VAT return. You still have to pay the VAT at the time of purchase, but if you maintain perfect records and keep all your invoices and statements, you can submit them to HMRC with your VAT return and get reimbursed.

Understanding VAT Registration

VAT registration is the process you need to follow to ensure that your company is correctly registered with HMRC. You can get a VAT registration number and access to the VAT online portal. The purpose of the registration process is to ensure that your company meets all the VAT requirements and that HMRC can provide you with support, accurate information, and access to relevant systems so you can manage your VAT returns and claims.

If you register for VAT, you can avoid future fines or penalties should you go over the VAT threshold. You can also cement your company’s reputation as many companies perceive VAT registration as a sign of stability which benefits smaller companies wanting to trade globally.

Did you know? The Making Tax Digital (MTD) for VAT process is now mandatory for all companies registered for VAT. If you registered for VAT after it was launched, you would have been automatically signed up to MTD unless any exemptions apply to your business. MTD requires that you keep accurate VAT records and use a compatible software solution to submit your VAT returns.

Preparing for VAT Registration

You should follow these steps to ensure you are eligible to register for VAT and have everything you need to make the process as smooth and easy as possible.

Assess Eligibility

When your company has a total VAT taxable turnover of more than £85,000 over the period of a year, then you are eligible to register for VAT. The same applies if you anticipate that your turnover will exceed that same amount – £85,000 – in the next 30 days.

However, you can still register for VAT if you earn below the threshold. The UK tax authority allows companies below the £85,000 annual turnover to register and experience the same benefits as those on or above the VAT registration threshold. This is known as voluntary registration.

It is also important to note that the HMRC still expects your business to register for VAT if it is not based in the UK and if it provides any goods or services to the UK or plans to in the next 30 days. You will also need to register if you recently purchased or took over a company that has already been VAT registered.

Exemptions: If your company sells items that are VAT exempt, then you do not have to register for VAT. You can find out more about which items are exempt from VAT here.

Did you know? The threshold to de-register for VAT is £83,000, and both the de-register and registration VAT threshold amounts are frozen until 31 March 2026.

Gather Required Documentation

Paperwork is part and parcel of running a business, and registering for VAT is no different. You will need to get the following items before you can start the process:

• Your Government Gateway User ID and password to log into the system and start the process. If you don’t have these, you will get them as you begin the HMRC VAT registration process. Start here.
• If you are a limited company, you’ll need your company name, paperwork that outlines your turnover and the type of business you do, your bank account details, your Unique Tax Reference (UTR) number, and your Company Registration Number.
• Also, have your Pay As You Earn (PAYE), Corporation Tax, and Self Assessment information and paperwork in hand.
• Suppose you are VAT registering as part of a partnership or as an individual. In that case, you’ll need your:
  • Date of birth
  • National Insurance (NI) number
  • A valid form of ID such as a passport or driving license
  • Your business turnover
  • Details about the work you do
  • Your bank account details

• Payslips, P60s, and Self Assessment returns
• All details of previously owned businesses you’ve had over the past two years and records of sale if you purchased your current business 

Note: You will also need to decide if you would like to handle your VAT registration yourself or if you’d like to use an agent.

Organise Business Information

In addition to sourcing all the above documents, you should also put accurate record-keeping and VAT management systems in place. Ensure you have the right software to manage and submit your VAT returns and a digital record-keeping tool to store, manage and analyse your information to better manage your VAT returns.

Did you know? Most companies use a trusted VAT accounting system to ensure they submit the correct information to the tax authority. HMRC has a complete list of trusted service providers capable of making your VAT returns process much easier and smoother.

Step-by-Step Guide for VAT Registration

The steps below will talk you through VAT registration and the various considerations you need to make as you move through the process.

Step 1: Determine the VAT registration authority

If you are registering for VAT in the UK, then your VAT registration authority is HMRC. You can start the registration process here if you want to register online, or you can download this form to complete your VAT registration by post.

If you are registering for VAT in the rest of the world, then your VAT registration authority will be the one within the regions you are trading. For example, if you’re trading in Europe, then you would need to register with the specific VAT One Stop Shop (OSS) in the country where you’re doing business. You can register in any of the member states. The Irish VAT OSS is an accessible VAT registration resource, allowing you to follow the process in English. The paperwork requirements are almost identical to those required by HMRC.

Step 2: Complete the application form

Start by registering online with HMRC. You will need your Government Gateway User ID and Password to start the process. If you don’t have these, you can create a new sign-in as a new user. If you’ve lost or forgotten your password or Government Gateway User ID, you can follow a clear online walkthrough to help you get a new one. If you cannot register for VAT online and need to do so by post, follow these detailed instructions on how to register for VAT by post here.

Your registration process is step-by-step and straightforward. It will help you enter your business details while creating an online VAT account that will become one of your most invaluable resources. You can use this online account to pay your VAT, assess your status, file returns, and so much more. If you opted into using an agent to manage your VAT registration, they will do all this for you and simply let you know when you can expect to receive your VAT number and VAT online portal logins.

When you’re registering for VAT, you’ll be asked to choose a particular VAT accounting scheme, and this will be used by HMRC to calculate the amount of VAT you owe or how much it has to refund you. These accounting schemes are:

• Annual VAT accounting: lets you submit a VAT return once a year with quarterly payments based on estimates that are, in turn, based on previous returns.
• Flat-rate VAT accounting: allows some smaller companies to bypass VAT accounting and pay a percentage of their turnover.
• VAT cash accounting scheme: built on the basis that you have charged for VAT when making cash transactions and will then pay your VAT accordingly.
• Standard VAT accounting: asks that you submit a VAT return every month based on the VAT you have collected and paid, and then submit VAT payments to HMRC every three months.

Exemptions: Some exemption schemes have different VAT rules that apply to specific sectors or types of business. If this applies to you, you will have to register by post using a specific VAT1 form. Once you have followed the postal requirements and received your VAT number, you can then sign up for an online account.

Step 3: Submit supporting documents

The online portal makes it easy to add the relevant documents required by the tax authority as you move through the VAT registration process. If you are doing this by post, ensure you are providing the authority with every single item outlined in the VAT1 form. Both processes are clear on what paperwork and information you need to submit to complete the process and become VAT registered.

Await verification and approval

You can expect to receive your VAT Certificate of Registration and all your other important paperwork and information within around 30 days from your application. However, this is often provided much faster than that, with many companies receiving all their paperwork and details in just over a week.

Receive VAT registration number

Once you’ve received your VAT Certificate of Registration, you can use all the information on the certificate and in the provided paperwork sent to you by HMRC to log into your HMRC VAT portal, complete your registration, and start trading as a VAT-registered business.

When you have completed your VAT registration, you will receive a nine-digit VAT number that has to be included on every invoice you make and used to track your VAT progress. You need to start charging VAT and then reclaiming VAT from products or services you’ve bought from the moment you receive your VAT number and login. You cannot include VAT on your invoices until you’ve received your VAT number.

VAT Compliance Post-Registration

Congratulations! You’re VAT registered. Now it’s time to ensure you remain VAT compliant by submitting your returns online and keeping up-to-date with your paperwork and payments. These steps will walk you through staying compliant once you’ve registered for VAT.

VAT invoicing and record-keeping

Registering for VAT does put pressure on you to maintain your paperwork correctly. While this may feel boring and takes up time, it keeps your business on the straight and narrow. You’ll be immensely grateful if you ever discover a problem because finding information will be easy, and resolving it will be quick. Plus, you can then take advantage of intelligent technologies and solutions designed to make your life easier for VAT management.

Filing VAT returns

If you have registered for VAT, then you need to submit a VAT return. If you are not sure when you’re supposed to submit your VAT return, visit your online VAT account. It will tell you exactly what deadlines you have to work towards. 

Important: VAT due date deadlines are non-negotiable. If you don’t submit on time, you could face penalties and fines that can cost your company money and potentially your reputation.

Did you know? We have a comprehensive walkthrough that takes you through everything you need to know about submitting a VAT return.

Compliance obligations

Spend time inside your VAT online portal so you know exactly what type of VAT reporting structure you have – monthly, quarterly, annually, specialised – and what deadlines you need to meet. Make these deadlines part and parcel of your business life so you are always ahead of the paperwork.

Work with an accountant or use a professional accounting software solution to manage your paperwork, filing, and VAT returns so the process is easy, accurate and up-to-date. 

VAT Registration Considerations for International Business

If you need to register for VAT in other countries such as the EU, you will need to follow the straightforward VAT registration process for each country, providing the relevant paperwork and information. Like HMRC, most VAT authorities are online, which makes the process a lot easier to manage. Because trade with other countries is considered an export of goods and services, you will need to assess whether or not your goods are VAT exempt or need to include VAT.

You will need a VAT number for every country you operate in, and you will need to ensure you are compliant across each country, meeting their VAT return deadlines and expectations on time. This level of compliance will likely require a lot of your time, so consider using dedicated technology to help you efficiently manage the process.

Blue dot and VAT Registration

You may be concerned about how you’ll manage your VAT returns and admin now that you’ve registered for VAT, but don’t be – there are solutions available to help you make your VAT as seamless and easy as possible. The Blue dot artificial intelligence (AI) tax compliance platform is a centralised, standardised and digitalised platform that provides complete visibility into your VAT and tax processes and systems.

There is also the Blue dot training series that offers you insights and support from tax experts who understand the implications of VAT and how you can best manage it within your business. 

We also offer you Taxable Employee Benefit (TEB) compliance services and solutions. We have a variety of VAT services designed to make your life easier so you can reap the benefits from your VAT registration without the stress.