The VAT registration threshold for 2024 is £90,000, increasing from £85,000 in the previous tax year. This threshold applies to your taxable turnover over a 12-month period. To ensure you don't exceed the VAT threshold, consider the following accounting actions:
Monitor Your Turnover Closely
Keep a close eye on your taxable turnover by:
- Tracking your sales regularly, ideally monthly
- Using accounting software to automate calculations
- Setting up alerts when you approach the threshold
Plan for Seasonal Fluctuations
If your business experiences seasonal peaks:
- Project your annual turnover based on historical data
- Consider temporarily reducing activity if nearing the threshold
Manage Your Pricing Strategy
Be strategic with your pricing:
- Avoid unnecessary discounts that might increase sales volume
- Consider raising prices slightly to reduce turnover if close to the threshold
Time Your Invoices Carefully
Manage your cash flow and turnover by:
- Delaying invoices until the next tax year if near the threshold
- Spreading large orders across tax years when possible
Consider VAT-Exempt Products
If applicable to your business:
- Focus on selling VAT-exempt goods or services
- Diversify your product range to include more exempt items
Apply for Exception
If you temporarily exceed the threshold:
- Apply for a registration exception from HMRC
- Provide evidence that your taxable turnover will fall below £88,000 in the next 12 months
Remember, if you do exceed the threshold, you must register for VAT within 30 days. Failing to register when required can result in penalties, so it's crucial to stay vigilant and act promptly if you approach or cross the threshold.
https://www.gov.uk/register-for-vat
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