Firms can calculate effect of registering for the tax.
HM Revenue and Customs (HMRC) has launched a digital tool to help businesses estimate what registering for VAT may mean for them.
The VAT Registration Estimator is designed to show small firms when their turnover could require VAT registration - and the tax’s likely effect on profits.
The tool runs on the Government guidance web pages. HMRC says it will not record the details that businesses input.
A business must register for VAT if total taxable turnover for the previous 12 months is more than £90,000. The VAT threshold went up from £85,000 on 31 March 2024.
Firms that expect their turnover to go over £90,000 in the next 30 days are also required to register.
The new VAT Registration Estimator can help businesses approaching the threshold or considering voluntary registration. It also links to information about the registration process.
The estimator tool is free to use and takes around 20 minutes to complete. It does not provide bespoke business advice.
A VAT-registered business must charge VAT on eligible sales and can usually reclaim it on eligible purchases. There are around 300,000 new VAT registrations each year.
