VAT

I decided to register for VAT from the outset.  My rationale behind this was that it seemed sensible to get everything set up and running smoothly before I was forced to register having hit the turnover threshold of £77,000.  Being VAT registered can also give a level of credibility to a new business and if customers are also likely to be VAT registered, it will not impose an additional cost on them.

Having done some background reading (the HMRC web site is quite helpful here) and spoken with some contacts, it looked as if I would be best to register and also apply to use the flat rate scheme which makes the administration considerably easier.  I made a note that if my annual turnover is expected to exceed £230,000 in the next 30 days then I will have to stop using the flat rate scheme.

To register for VAT, I was told that you need to have your company bank account details.  Also, it is not possible to register for VAT and the Flat Rate Scheme at the same time on-line, so I sent the following letter:

Wolverhampton Registration Unit
HM Revenue & Customs
Deansgate
62 – 70 Tettenhall Road
Wolverhampton
WV1 4TZ

Dear Sirs

Application for VAT Registration and joining of the Flat Rate Scheme

Please find enclosed, completed forms VAT1 and VAT 600FRS in respect of VAT registration for 19 Corporate Finance Ltd.

We are applying for initial registration, together with joining the Flat Rate Scheme at the same time as we wish to use the Flat Rate Scheme from the start of registration, as advised in section 5.2 of notice 733.

We look forward to receiving confirmation, together with VAT number in due course.

 

Yours faithfully

 

The VAT Registration number came through 11 days after posting the letter.  I called 0845 0390279 ten days later as I had not heard about the Flat Rate Scheme.  The lady who took my call was very helpful and told me that the Flat Rate application had been processed, would automatically come off the system and be with me the following week.  It duly arrived the following Monday.

I have added the VAT number to both my letterhead and invoice stationery.

Again, I have registered for online filing.

I am glad that I decided to submit my first VAT return early, ahead of the deadline of one month and seven days from the end of the VAT quarter.  I logged onto the HMRC website using my Government Gateway account and was asked whether I wanted to set up a direct debit.  I thought that this would reduce my administration and so went ahead.  It was a week before this would become active, hence my relief that I started early.  The set up process itself was very straightforward.

Completing the VAT return form online was easy using the information in the accounting system and the guidance on http://www.hmrc.gov.uk/vat/managing/returns-accounts/flat-rate-returns.htm .  Only Boxes 1 and 6 required numbers to be entered although zeros had to be entered for the remainder.  For the first year the VAT Flat Rate is reduced by 1%.  At the end of the submission process I was able to download a pdf copy of my VAT return.

I then double checked that there would be sufficient cash in the company’s bank account on the day that HMRC will take out the direct debit.