Tax tip: 19 October 2023

A non-VAT registered business should be monitoring its taxable turnover to see whether it needs to be VAT registered.

Check turnover

For most small businesses this means at the end of each month checking whether your taxable turnover has exceeded the current registration threshold (£85 000) when looking back a maximum of 12 months. Where it is anticipated that registration might be inevitable at some point in the future it is wise to start planning now.

For example VAT charged to a business in the period prior to VAT registration can be recoverable on the first VAT return.

This is where it satisfies the rules which in brief are:

• VAT on services within the six months prior to registration for example on rent telephone; and
• professional fees that relate to the taxable business.

Fixed assets

VAT charged on fixed assets such...