HMRC has released a Value Added Tax (VAT) Registration Estimator for small businesses. This tool will inform businesses whether registering for VAT would benefit them, especially as the threshold now sits at £90,000.

What is the VAT Estimator? 

In its development, the VAT Registration Estimator responded to feedback from small businesses. The tool will help ascertain if companies are required to register for VAT and its effects on their profitability. Users can input different situations to predict outcomes of what may happen.

The estimator is open 24/7 as part of HMRC’s push to reduce the number of basic questions about VAT called into their helplines. This move towards digital tax management will help small businesses determine if they are or will be required to register for UK-based VAT.

Criteria for VAT Registration

You need to register for VAT with HMRC if:

• You are over the £90,000 threshold (formerly up to 31 March 2024 this was still at only £85,000) in terms of your total VAT taxable turnover for the previous 12 months.
• Anticipated turnover will exceed the £90,000 limit in the next 30 days.
• You are an overseas business with goods or services located abroad but supplied to the UK.

Businesses that fall below the VAT threshold also stand to gain from the estimator, most notably those contemplating voluntary registration. The tool explains what is involved with VAT registration and includes links to other resources. 

Attached is an external link for further information about the VAT Registration Estimator: Check what registering for VAT may mean for your business – GOV.UK (www.gov.uk)

If you have any questions, we are here to help!