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Crossed the VAT Threshold? What to Do Next

20 Jul 2025William B
Crossed the VAT Threshold? What to Do Next

Crossed the VAT Threshold? What to Do Next

If your taxable turnover has exceeded the UK VAT registration threshold — currently £90,000 in any rolling 12‑month period — you’ve just triggered some important legal obligations.
Understanding the timeline, the process, and your options can save you from unexpected penalties.

📅 Key Deadlines You Can’t Miss

  • 30 days to register — You must notify HMRC within 30 days of exceeding the threshold.
  • Liability start date — VAT becomes payable from the first day of the second month after you go over the limit.
  • Missing these dates can result in backdated VAT charges and interest.

📊 Step‑by‑Step Guide to Getting VAT‑Compliant

  1. Verify Your Turnover Figures

    • Include all standard‑rated and zero‑rated sales in the last 12 months.
    • Exclude VAT‑exempt income such as certain financial services or property transactions.

  2. Register Online with HMRC

    • Sign in via your Government Gateway account.
    • Complete the VAT1 form or VAT1A (for certain sectors).
    • You’ll receive a VAT registration number and an effective date of registration.

  3. Set Up VAT‑Compliant Invoicing

    • Invoices must include your VAT number, VAT rate, and the net + VAT amounts.
    • Update templates in your invoicing or accounting software.

  4. Choose the Right VAT Accounting Scheme

    • Standard Scheme — Pay and reclaim VAT based on invoices issued/received.
    • Flat Rate Scheme — Pay a fixed percentage of your turnover (simpler admin).
    • Cash Accounting — Pay VAT only when you receive payment from customers.

  5. Prepare for Making Tax Digital (MTD)

    • You must keep digital VAT records and submit returns using MTD‑compatible software.
    • Examples include Xero, QuickBooks, Sage, and FreeAgent.

⚠️ Penalties & Risks

  • Late registration — Backdated VAT from your liability date.
  • Penalties — Percentage‑based fines, increasing with the delay.
  • Interest — Accrues on late VAT payments.

💡 Pro Tips

  • Consider voluntary registration if your turnover is close to £90,000 — it allows you to reclaim VAT on business purchases.
  • Review pricing strategy — Decide whether to absorb VAT or pass it on to customers.
  • Automate record‑keeping — Reduces admin errors and ensures timely returns.

🚀 How Skyie Global Can Help You

At Skyie Global, we simplify VAT compliance so you can focus on your business growth:

  • End‑to‑end VAT registration — We handle the HMRC process for you.
  • Custom VAT setup — Tailored to your accounting software and industry.
  • Quarterly VAT submissions — Fully MTD‑compliant filing on your behalf.
  • Ongoing VAT health checks — Ensure your business stays compliant.

📧 Email: hello@skyieglobal.co.uk
📞 Call/WhatsApp: +44 7882 348 898
🌐 Visit: www.skyieglobal.co.uk

By acting quickly and setting up the right systems now, you’ll avoid penalties, stay HMRC‑compliant, and maintain healthy cash flow.