VAT registration requirements

All businesses trades within and/or with the UK must follow the VAT registration requirements. Value Added Tax (VAT) stands for Value Added Tax. You must register for VAT with HM revenue and Customs if your annual sales exceed the VAT registration thresholds.

VAT registration thresholds in the UK

Below is the VAT registration requirements and threshold with effect from 1 April 2017.

scenarioAnnual sales threshold
1VAT registration£85,000 and more
2Distance selling into the UK registration£70,000 and more
3Bringing goods into the UK from the EU£85,000 and more
4VAT deregistration£83,000 and less
5To complete the simplified EC Sales list£106,500 or less & supplies to EU countries is less than £11,000
source: GOV.UK

Post VAT registration requirements

Once your business – a sole proprietorship or partnership or your company is successfully registered for VAT in the UK, HMRC will issue a VAT certificate to your business. In the VAT certificate, you will see your default VAT return quarter end date. Usually, it is a standard 3 months per quarter period. For example, if HMRC states your VAT return quarter end date is 31 March then you would have one month and 7 days to submit VAT return for 1 Jan to 31 March to HMRC.

You may apply to HMRC to change your VAT return quarter end date. For example, you can apply to join VAT annual accounting scheme if your sales are less than £1.35 million or less per year. Once you joined the VAT annual accounting scheme, you would only require to submit one VAT return per year.

Other compulsory filings

If your business is a limited company or limited liability partnership (LLP) registered with Companies House, you must comply with the UK company law.

You must prepare and submit the the documents to Companies House in addition to your VAT return to HMRC.

You can submit your company documents online. You would require your company’s authentication code to do so. The authentication code is the electronic equivalent of your company’s director(s) signatures. Hence, you must keep it safe.

Companies House has also created an interim paperless filing service to accept documents which would normally require a live signature during COVID-19 pandemic. You can easily upload your documents to the Companies House website.

If you require help with your company’s filings, contact our accountants. They will be more than happy to assist you.

Register for the Eat Out to Help Out Scheme

Businesses providing food and drinks for immediate consumption can register for the Eat Out to Help Out Scheme and offer a 50% discount (up to a maximum of £10 per person) on food and non-alcoholic drinks to customers dining in. This scheme is to help restaurants to attract customers to dine in thus bring income to the business during the COVID-19 pandemic.

You can run the discount offer all day, every Monday to Wednesday from 3 August to 31 August 2020. You must register first before you offer a discount to your customers.

The benefit of this scheme is that you can claim back the discounted food bill from the government. HM Revenue and Customs will pay you back.

  • restaurants
  • cafés
  • public houses that serve food
  • hotel restaurants
  • restaurants and cafes within tourist attractions, holiday sites and leisure facilities
  • dining rooms within members’ clubs
  • workplace and school canteens

The Eat Out to Help Out Scheme open for registration from 13 July 2020. Generally, you must wait 7 days from registration to make your first claim. HM Revenue and Customs (HMRC) will pay your claim into your bank account within 5 working days. You can claim on a weekly basis. Your claim would be treated as taxable income under your business.

A dedicated helpline will be available to keen participating businesses from 13 July 2020.

Read Eat Out to Help Out Scheme guidance here.

Companies House filings during COVID-19 pandemic

Companies House also gear up to support UK businesses during COVID-19 pandemic. They will automatically extend your company’s filing deadline. This will help you to avoid a late filing penalty if you are unable to deliver your company accounts on time during this pandemic. You do not need to do anything. You just need to go to Companies House website to check your new filing deadline.

On the same note, your confirmation statement filing deadline will also be extended. You would have 6 weeks to file your confirmation statement. Likewise, for the events driven filings, you will have 42 days (6 weeks) to notify Companies House instead of the usual 14 days filing deadline.

In addition, Companies House also created an interim paperless filing service to accept documents which would normally require a live signature.

During this pandemic, you are encouraged to submit your documents online to Companies House. You can use the webfiling service to file the following documents to Companies House.

To file online, you would require your company’s authentication code. The authentication code is the electronic equivalent of your company’s director(s) signatures. Keep safe your authentication code.

If you require help with your company’s filings, contact Our accountants. They will be more than happy to assist you.

Temporarily reduced VAT rate to 5%

The UK government has announced on 8 July 2020 to temporarily reduced VAT rate to 5%, from the standard rate of 20% to boost the UK economy during the COVID-19 pandemic.

The temporary 5% reduced VAT rate will come into effect for transactions occurred between 15 July 2020 and 12 January 2021.

if you are a VAT registered company and in business in the following sectors then you would charge 5% VAT to your customers from 15 July 2020, instead of the 20% VAT.

For example, say your usual price for a plate of stir fried noodles is £9 plus VAT. Currently, your selling price to your customers would be £10.80 inclusive of 20% VAT (£9+20% VAT). From 15 July 2020, your selling price will fall to £9.45 (£9+5% VAT). Your customer will save £1.35 and you will lose nothing except for adjusting your VAT calculation.

Hospitality sector

  • Restaurants
  • Pubs,
  • Cafes,
  • Catering and takeaways.

Hotels and holiday accommodation

  • Hotels
  • Camping sites
  • Hostels
  • Bed and Breakfast
  • Caravan sites

Attractions

  • Shows
  • Theatres
  • Circuses
  • Fairs
  • Amusement parks
  • Concerts
  • Museums
  • Zoos
  • Cinemas
  • Exhibitions
  • similar cultural events and facilities

Read the guidance on temporary 5% reduced VAT rate here.

This temporarily reduced VAT rate to 5% will encourage the public to visit attractions with their kids and eat out during this pandemic. Of course, everyone must follow the social distancing rules.

Companies House filings during COVID-19 pandemic

Companies House also step up to support UK businesses during COVID-19 pandemic. They will automatically extend your company’s filing deadline. This would help your business if it is severely affected by the COVID-19 outbreak and help you to avoid a late filing penalty. You do not need to do anything. You just need to go to Companies House website to check your new filing deadline.

On the same note, your confirmation statement filing deadline will also be extended. You would have 6 weeks to file your confirmation statement. Likewise, for the events driven filings, you will have 42 days (6 weeks) to notify Companies House instead of the usual 14 days filing deadline.

In addition, Companies House also created an interim paperless filing service to accept documents which would normally require a live signature.

During this pandemic, you are encouraged to submit your documents online to Companies House. You can use the webfiling service to file the following documents to Companies House.

To file online, you would require your company’s authentication code. The authentication code is the electronic equivalent of your company’s director(s) signatures. Keep safe your authentication code.

If you require help with your company’s filings, contact Our accountants. They will be more than happy to assist you.

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