Once registered for VAT, what are my responsibilities?

Once registered for VAT, there will be a number of additional responsibilities that the business needs to be compliant with, including the following:

• You must charge VAT on all invoices from the date of registration to your customers (ignoring non-UK and other specific issues).

• You must always reflect your VAT registration number on all invoices (in order to be able to include VAT on that invoice).

• You have the responsibility for ensuring that you are charging the right amount of VAT on each sales invoice.

• You must prepare and submit VAT returns to HMRC on a quarterly basis.

• You must pay any VAT due to HMRC within the required payment deadlines.

• You are required to keep adequate VAT records and a VAT account e.g. copies of sales invoice, supplier invoices,
receipts and bank statements.

Key reasons why a business might register for VAT before they are required to register:

If the amounts of VAT being incurred on business costs are high anyway, then it may be financially beneficial to register and be able to reclaim this VAT e.g. investment in a website or online platform, significant amount(s) of marketing spend in the early stages of business etc.

From a marketing perspective, being VAT-registered may be an important consideration to customers and potential business partners e.g. it makes you look larger (non-VAT registered businesses are below turnover of £85,000).

Where the majority of your customers are already VAT registered then whether you charge VAT or not on your goods or services to them may not be a concern (and you can reclaim input VAT from Day 1).