I’m 4 months in and find myself buying more and more items where I am paying VAT.
Should I be VAT registered?
In my opinion, you are likely to be worse off if you register without having to as you will have to increase your prices to make up the amount of vat you have to pay on your sales.
If your sales are often to vat-registered businesses, you may see an uplift in your sales as those businesses would prefer to buy from you rather than non-registered sellers.
If your sales reach £85K (soon to be £90K) in the previous 12 months, you MUST register.
But seek proper advice to make your decision and just treat the info you get on the forum as that, info but not advice.
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You only need to be VAT registered once your turnover passes 85K (i think it’s 90k soon).
Make the most of it before that.
Sourcing for UK is easier when you’re not VAT registered. I wouldn’t register until you need to
You will always pay VAT while purchasing B2B goods whether you are VAT registered or not.
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If you are registered, you can claim it back. That’s the whole point.
Why?
As @Andrew said, you will be paying VAT on purchase no matter what. The difference is that you are not paying VAT on sale if u are not VAT registered, so it is better to stay non VAT registered as much as you can …then register for VAT.
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I think that the others summed up the advice very well - there is a compulsory threshold for VAT registration which only applies to UK - established businesses. This would be considered advantage when it comes to customers buying from you and not having to pay the VAT.
But from what I know, as @AmazonUKForumRefugee mentioned, many businesses prefer to trade with VAT-registered businesses and are seeking VAT invoices, which could lead to increase in sales to this category of customers.
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