Simple VAT planning

Here’s our guide to some basic VAT planning for small businesses.

Keep your receipts
As you can only claim back the VAT if you have a valid receipt, think of VAT receipts as hard cash rather than boring paperwork.

Keep below the registration threshold
The registration limit is currently a turnover of £61,000 pa and means you would have a lot more paperwork to do and you would have to charge your customers an extra 17.5%. If your business may just stray over this come the end of the year, consider taking a holiday so that you don’t have to register.

Split your businesses
If you operate two businesses and their combined turnover would cause you to have to register, consider splitting them as, say, two limited companies. As long as they are (and are run as) genuinely separate businesses you will then not have to register for VAT.