Professional Accounting, tax and business advisors
VAT Basics - when to register
VAT vs Non VAT
Any business can register for VAT with the HMRC so long as they intend to make VAT supplies to consumers or b2b. However in some cases businesses are obligated to register for VAT see :
Recording VAT transactions
Recording VAT transactions
We are only explaining 23 categories of VAT (Out of Scope for VAT, VAT Exempt transactions and non-registered suppliers).
Out of Scope
These types of transactions are not included anywhere on the VAT return neither VAT 6 and 7.
e.g.MOT, wages, other taxes, place of supply of service is not in the UK, statutory fees, congestion charge,.
Services supplied abroad also fall under Out of Scope.
Exempt Supplies
These are included in box 6 and 7 but don't impact the VAT due. Examples of these transactions include:
e.g. Sporting and PE, education and training, some medecal treatments, financial services, insurances and investments.
Non registered VAT companies/traders
If you are VAT registered and purchase supplies from non registered VAT Companies or Traders you would treat these as exempt supplies - i.e. include them in Box 7 of the tax return but not in boxes 2-5.
We have not covered guidance here in respect of Zero rates, partially exempt or reverse charges. This will covered in our advanced section.
