voluntary VAT registration

[basoora]

Are there any negative sides to voluntary VAT registration? I have a small business and on many purchases you get VAT back if you're registered. If I did, would I still get VAT back on purchases even though I haven't reached the threshold for compulsory registration? And except for the added paperwork, are there any negative sides to it at all?

 

[Richard Schollar]

Hello

You do realise this is an Access/Excel forum, not a tax forum?

 

[Richard Schollar]

Anyway:

>>>Are there any negative sides to voluntary VAT registration?

Yes, admin burden is significant. Potential to have a VAT inspector trawl thru your records could be unpleasant.

>>>>I have a small business and on many purchases you get VAT back if you're registered. If I did, would I still get VAT back on purchases even though I haven't reached the threshold for compulsory registration?

Yes.

>>>>> And except for the added paperwork, are there any negative sides to it at all?

Of course - a higher cost to your customers for one! If your customer base is to businesses (who are likely to be VAT-registered themselves) then this may well not be a consideration (altho your customers may prefer you to be VAT registered rather than not). However, if you have a largely consumer base, the imposition of VAT on your selling price may make you uncompetitive in the market place if your competition isn't VAT registered.

 

[Norie]

Isn't it kind of illegal not to register for VAT?

PS I only did one year of law at university, and only have a Higher in Accounting, so I could be totally wrong.

 

[Richard Schollar]

Isn't it kind of illegal not to register for VAT?

Only if you exceed the thresholds for turnover.

 

[Jon von der Heyden]

If I did, would I still get VAT back on purchases even though I haven't reached the threshold for compulsory registration?

You can claim VAT back for purchases predating your registration too, 1 year I think...