Should I register for VAT voluntarily?

Voluntary registration can make sense if most customers are VAT registered, you have significant VAT-bearing costs, or being VAT registered fits the commercial position you want to present. It can also avoid having to change pricing and systems suddenly when compulsory registration arrives.

If you mainly sell to consumers or organisations that can't recover VAT, registration can make your price effectively higher unless you absorb some or all of the VAT yourself. It also adds reporting and record-keeping responsibilities.

Look at who your customers are, how prices are agreed, how much input VAT you could recover and what registration would do to your margin. The right answer can be different for two businesses with exactly the same turnover.

If you decide not to register voluntarily, monitor taxable turnover on the correct rolling basis. Registration is an area where leaving the review until year end can create an avoidable problem.