Advantages Of VAT Registration

August 11th, 2007 Comments off
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Note that the registration of VAT is compulsory if turnover of a business is over the threshold. However, in situation where a business’s turnover has not reached the VAT’s threshold, there are some advantages to register for VAT.

  

Following Advantages to apply for VAT voluntarily even when the turnover threshold for VAT has not been reached:-  
  

  1. VAT paid on inputs can be claimed back.
  2. In fact the non-registered business like the man in the street cannot claim the VAT it has paid

 

 
  

Circumstances where voluntary registration applies:-  
  

  • Either your main customers are registered for VAT and need a VAT invoice from you to claim the tax back themselves or
  • Your outputs are mainly zero rated goods ( or exports which are all zero rated ), so that you will be in a position of reclaiming, rather than paying VAT or
  • Your inputs are high enough to attract sufficient VAT to be worth recovering

 

Note that the main disadvantages of registering for VAT is the extra work and book-keeping hence the need to be extra careful when deciding whether to register voluntarily . 

 
  

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