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UK VAT registration - which scheme?
Thread poster: Gillian Searl

Gillian Searl  Identity Verified
United Kingdom
Local time: 02:40
Member (2004)
German to English
Oct 5, 2007

Hi everybody,
I am in the happy position of having to register for VAT in the UK and I have been looking at the various options. So this is a question for others who are VAT registered in the UK - which scheme do you use? As I understand it I have the choice of 3 options.
1) Flat rate
2) Cash accounting
3) Annual return.

The cash accounting option makes sense to me - but so does not having to do it regularly. Not sure about the flat rate I'd be grateful for advice from anyone who has been this way before me.

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Charlie Bavington  Identity Verified
Local time: 02:40
French to English
Not sure if this helps...! Oct 5, 2007

Hi there - I looked into VAT earlier this year, after a couple of very healthy months!
I'm not sure I like the sound of the retrospective element of it (re-invoicing was mentioned - yikes!), so I'm just going to make sure I stay under the threshold this year.

One useful piece of info I did glean was that you can be "registered" yet still not charge VAT if your turnover is indeed over the threshold BUT that you wouldn't charge VAT anyway 'cos it's an intra-EU VAT-exempt service. Such as translation for customers in Germany. You wouldn't charge them VAT, whether you're registered or otherwise.
I'm afraid I'm a bit hazy on the details, but in layman's terms my understanding was that you get in touch with HMRC, say that your turnover is over the threshold BUT that a significant chunk is non-VAT (I think exempt is the word, but it may not be), and they thanks you profusely and give you a particular status equating to 'earns enough to be VAT registered but doesn't actually charge it'.

I plan to investigate further for 2008-09 - this year, I'm just gonna make sure I don't cross the threshold....

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Amy Williams  Identity Verified
United Kingdom
Local time: 02:40
Italian to English
+ ...
UK VAT registration - which scheme? Oct 5, 2007

Hi Gillian,

I started off doing quarterly returns on the basis of invoices issued and then switched to cash accounting (still on a quarterly basis). The HMRC VAT online return system is incredibly easy to use and you could probably do it in your sleep. Just make sure you sign up for the e-mail reminders if you're not doing paper returns. My accountant has recently suggested checking out the flat rate system but a) there was a problem finding the right category for translation (maybe secretarial services or something similar??) and b) with doing so much work for companies abroad there seemed little point. I intend to check it out though--incidentally, the VAT helpline has been very useful.

I think it very much depends on your clients' location and how reliable they are in the payment department! At least with cash accounting you don't hand anything over to HMRC until it's in your hands.

I'd be interested to know what the flat rate is for translation, if you have one.


[Edited at 2007-10-05 10:05]

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UK VAT registration - which scheme?

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