You’ll only need to show a VAT number on your invoices if your business becomes VAT registered, but registering for VAT isn’t a requirement for starting or operating a business. So, if you’re not VAT registered, and you don’t need to be, then you can simply send your invoices out as normal.
If you become VAT registered, this has an impact on the information you need to show on your invoices, which can lead to all sorts of questions about what happens between registering, and getting your VAT number. Don’t worry, we’re here with answers.
Is my business required to register for VAT?
The VAT registration threshold is £90,000, so you don’t need to become VAT registered unless your total taxable turnover (the amount you receive from making sales) reaches the threshold in a consecutive 12 month period – or you expect it to within the next 30 days.
While we’re on the topic of VAT registration though, it’s worth mentioning that some businesses find it beneficial to register for VAT on a voluntarily basis, even if their turnover is lower than the threshold. Our article about voluntary VAT registration explains the reasons for this in more detail.
Sending invoices after you register for VAT
Your business will be assigned a unique VAT number to identify your VAT records correctly. Once issued, you must show it on every invoice you send out, along with a breakdown of the amount of VAT charged on the sale.
You’ll normally receive your new VAT number within 30 days of registering, but what are you supposed to do about invoicing clients until it arrives?
Invoicing clients whilst waiting for your VAT number
Fortunately, your business can still send an invoice whilst waiting for the VAT number to arrive, so normal business operations don’t need to go on hold during the wait.
Because the business is VAT registered, it still needs to account for any VAT on its sales, but can’t show this on the invoice without a VAT number. This means that VAT registered businesses which are waiting for their number to arrive can still issue the invoice, but without the VAT element included.
To account for the VAT that should be included, the invoice must show that VAT is pending, so be sure to remind customers that there will be a follow-up invoice.
Once you have been issued with your VAT number, you will need to send out a secondary invoice, this time with the additional VAT amount included, as well as showing your VAT number.
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