VAT

Registration, schemes and quarterly returns under Making Tax Digital.

VAT registration becomes compulsory the moment a business's taxable turnover crosses £90,000 in any rolling twelve-month period — not a calendar or accounting year, but any twelve consecutive months. Late registration is one of the most common HMRC penalties for growing businesses, because the threshold is checked monthly and missed easily.

We monitor turnover, flag the registration trigger before it arrives, and complete the application — typically two to four weeks for HMRC to issue the VAT number.

Voluntary registration below the threshold often makes sense for B2B companies: registered customers can reclaim the VAT on your invoices, and you can reclaim VAT on your own costs. For B2C and mixed businesses the calculation is less obvious, and the wrong choice locks the company into mandatory quarterly filings with no real benefit. We work through the numbers before recommending registration either way.

HMRC offers several VAT schemes that can simplify life or reduce the cash held against future returns:

• Flat Rate Scheme — for businesses under £150,000 of VAT-exclusive turnover
• Cash Accounting — for businesses paid late by clients
• Annual Accounting Scheme — for fewer filings

Each has trade-offs, and the right scheme depends on margin, customer mix and payment terms. We evaluate the options at registration and re-evaluate them annually.

All VAT-registered businesses now file under Making Tax Digital: digital record-keeping in MTD-compatible software, returns submitted through the software's API to HMRC, no manual entry on the gov.uk portal. We set up the software pipeline, prepare and review each quarterly return, file it, and reconcile the payment with HMRC's account.

From April 2026 Making Tax Digital extends to Income Tax for self-employed individuals and landlords above £50,000 of gross income; we'll bring affected partners onto the same workflow.