VAT registration threshold 85K Advice for Influencers and Online Content Creators

What are the reasons to Register for VAT?

Legal obligation: As we’ve already talked about, you have to sign up for VAT if your business makes more than £85,000 in a calendar year. Penalties and fines may apply if this is not done.

Credibility: When you sign up for VAT, clients and suppliers will see that your business is trustworthy and well-run.

Ability to Reclaim VAT: If your business is registered for VAT, you might be able to get back any VAT you paid on goods or services you bought for the business. This may lead to significant financial savings.

 

Why would you register for VAT if you don’t need to?

Even if your company’s annual sales are less than the £85,000 threshold, you can still sign up for VAT voluntarily. If your business often buys from vendors who are registered for VAT, this could be helpful because you can get back the VAT you paid. Additionally, it can help your reputation as a VAT-registered company.

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Are there benefits to being VAT registered?

Yes, there are a number of advantages to having a VAT registration:

Ability to Reclaim VAT: If your business is registered for VAT, you can get back the VAT you paid on goods and services for your business. For your company, this could lead to significant savings.

Improved Credibility: An increase in trust from customers and vendors is a direct result of becoming a VAT registered business.

When calculating its VAT bill, a business that has registered for Value Added Tax (VAT) can select froma number of different VAT schemes, including the standard VAT rate and alternative VAT schemes, such as the Flat Rate VAT plan.

 

What are the downsides of VAT registration?

Although there are multiple positives to having a VAT registration, there are also some drawbacks to think about.

Businesses that are registered for VAT are required to file regular VAT returns and keep very detailed records of all VAT invoices they send out and receive. This adds to their administrative work. This may take a lot of time and put more administrative work on the company.

Complying with Regulations Costs: The expense of adhering to VAT laws, the added bookkeeping workload, and the possibility of an HMRC inspection or inquiry.

Price Increases for Consumers: With a valid VAT registration, you are required to add VAT to your sales. As a result, your customers may have to pay more, which could make your products or services less popular. Customers who are VAT registered will not be negatively affected because they can simply earn back the VAT they are charged.

It’s possible that your company’s profit margins will shrink if you are unable to increase prices to account for value-added tax.

 

Do you pay vat on profit or turnover?

The value of a company’s taxable supplies is what determines the amount of value-added tax due in the United Kingdom. One common term for this is “turnover” of a business.

 

What expenses can you claim as a social media influencer?

Here are a few examples of tax-deductible expenses:

-Website design and development

-Accountant Fees

-Web Hosting

-SEO expenses

-Photographers

-Camera and Equipment

What are the justifications for filing for VAT?

Legal obligation: As we’ve already talked about, you have to sign up for VAT if your business makes more than £85,000 in a calendar year. Penalties and fines may apply if this is not done..

 

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham

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