How does VAT work for a small start up business?
Afternoon! 1. You don’t really have to think too much about VAT in the initial stages apart from keeping a record of turnover which is something you will be doing in your book-keeping anyway. You don’t have to register for VAT until your turnover in a rolling 12 month period exceeds £67,000. Price your items initially according to cost and the desired profit margin. When you become VAT registered you will just add VAT on top and the amount of VAT will be separately identified on your sales invoices. 2. Your income from the other business should not taken into account and each should eventually have its own VAT number and it is its own turnover that counts towards registration limits. However, they have to be genuinely separate businesses. Talk this one over with HMRC if you are the sole trader of both and they are involved in similar areas of business. 3. Once you reach the level you will need to amend your invoices as there are legal requirements to follow eg must show your VAT regist
