UK VAT Registration – An Overview for VAT Registered Company

Understanding VAT registration in the UK

VAT registration in the UK is a pivotal process that involves several steps, ensuring businesses comply with the tax regulations set by HMRC.

What is a VAT-registered Readymade company?

VAT-registered readymade companies are pre-formed businesses that have already been incorporated and registered for Value Added Tax (VAT) with HMRC. These companies are available for purchase by entrepreneurs or businesses who want to bypass the time and effort required for setting up a new company and registering it for VAT.

Who Needs to Register for VAT in 2025?

Businesses must register for VAT if:–

1. VAT Threshold is Exceeded:
   • The annual taxable turnover exceeds the threshold of £85,000 (as of 2025).
   • This threshold applies to a 12-month rolling period, not just the financial year.
2. Voluntary Registration: Businesses below the threshold can register voluntarily to reclaim VAT on purchases or improve business credibility.
3. Non-UK Businesses: Non-UK companies selling goods or services to the UK may need to register for VAT, even without a UK establishment.

How to Register for VAT in the UK in 2025?

To become VAT registered company in the UK, the companies have to follow a series of steps outlined by HMRC.

1. Online Registration via HMRC: Visit the HMRC website and create a Government Gateway account. Then, provide business details, turnover, and information about goods and services offered.
2. Post-Registration Steps:
   • Receive a VAT Registration Number
   • Get access to the VAT online account (VAT online services).
   • Understand your VAT return deadlines and payment obligations.
3. Non-UK Businesses: Non-UK companies selling goods or services to the UK may need to register for VAT, even without a UK establishment.

What are the key benefits of being a VAT registered company in the UK?

1. Reclaim VAT: Claim back VAT on business-related purchases.
2. Enhanced Credibility: VAT registration gives your business a professional image.
3. Avoid Penalties: Stay compliant to avoid fines for failing to register on time.

VAT Rates in 2025

Currently in the UK, there are three rates of VAT and an exemption rate:

Ceasing to trade in the UK: If your business ceases to trade in the UK, it can apply to deregister for UK VAT. Please note that deregistration can result in more VAT being owed to HMRC in certain circumstances. It is always worth taking advice on this point before applying to deregister.