VAT registration turnover limit £85,000

Tax

Did you know, your turnover limit for the VAT threshold is based on a rolling 12 months? It is NOT based on the financial year.

So many clients get caught out calculating their turnover to see whether they have exceeded the VAT threshold, and many don’t calculate their turnover at all.

This can be very costly for clients. In the last 6 months alone, we have identified 3 new clients who have gone over the VAT threshold before they had chance to appoint an accountant.

Client 1 – VAT cost to client £8,916
Client 2 – VAT cost to client £8,100
Client 3 – VAT cost to client £0

Client 3 was only able to avoid a VAT cost as we managed to pick up the turnover excess within the first months bookkeeping that we did for them. We managed to register them just in time thanks to our speedy monthly bookkeeping service!

These costs above do not include the potential fines and penalties that HMRC are able to raise due to non-compliance.

HMRC can charge you a penalty of up to:

  • 100% of any tax under-stated or over-claimed if you send a return that contains a careless or deliberate inaccuracy
  • 30% of an assessment if HMRC sends you one that’s too low and you do not tell them it’s wrong within 30 days
  • £400 if you submit a paper VAT return, unless HMRC has told you you’re exempt from submitting your return using your VAT online account or Making Tax Digital compatible software

Here’s a few quick pointers to help identify whether your business has exceeded the VAT threshold and whether you require accountancy services from us.

Q1 – Do you know what your annual turnover per month is?
Yes – move on to the next question.
No – you need our monthly digital bookkeeping services so that you do.

Q2 – Do you know how to calculate the turnover on a 12 months rolling basis?
Yes – Great, move on to the next question.
No – Contact us as we can check this for you.

Q3 – Is your *VAT taxable turnover over £85,000 within the last 12 rolling months?
*Your VAT taxable turnover is the total of everything sold that is not VAT exempt
Yes – you will need to register for VAT, we recommend you contact our offices so that we can calculate when you should have been registered as the VAT may need to be backdated.
No – we would still recommend using our digital monthly bookkeeping services so that we can monitor your turnover for you.


Chippendale and Clark are here to help your business in any business accounting areas that may feel alien to you. Let us take the stress away and call today. For our Chippenham office call 01249 465 435 or to contact our Swindon office call 01793 378 586.

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