Just crossed the VAT threshold? Or getting close? If your turnover’s hitting £90k (the updated limit from April 2024), then it’s time to get your head around VAT. It might sound like another layer of hassle—but with the right support, it doesn’t have to be.
Here’s a down-to-earth guide to what VAT means for your business in 2025 and how to stay on top of it without losing sleep.
What Is VAT and When Does It Kick In?
VAT (Value Added Tax) is a tax charged on most goods and services sold in the UK. If your taxable turnover goes over £90,000 in any 12-month period—not just by the end of your financial year—you must register for VAT.
It’s not optional. HMRC will expect you to register within 30 days of passing the threshold.
What Happens After You Register?
Once you’re VAT registered, you’ll need to:
- Add VAT (usually 20%) to the goods and services you sell
- Submit VAT returns (usually every quarter)
- Pay any VAT you owe to HMRC
- Keep digital records (yep, HMRC wants it all logged properly)
- Use Making Tax Digital (MTD)-compatible software to file returns
It sounds like a lot, but this is exactly where having a solid accountant or bookkeeping setup pays off.
The Perks of Being VAT Registered
It’s not all red tape—there are some genuine upsides:
- You can reclaim VAT on most business expenses
- It often gives the impression you’re a bigger, more established business
- It helps futureproof you if you’re planning to grow
Plus, if your clients are VAT registered too, they won’t mind paying your VAT—it’s just part of doing business.
Common VAT Pitfalls to Watch Out For
VAT isn’t just about adding 20% to your invoice and calling it a day. There are a few things that trip people up:
- Not registering on time – HMRC can fine you and backdate what you owe
- Missing return deadlines – leads to penalties and interest
- Using the wrong rate – not all goods/services are charged at 20%
- Not keeping proper records – your books need to show clear audit trails
Getting VAT wrong is a pain—but getting it right saves time and keeps HMRC off your back.
How to Make VAT Less of a Headache
The best way to deal with VAT? Don’t go it alone. Whether you’re just crossing the threshold or already registered, a bit of support goes a long way.
At Buzz Accounting, we help small businesses:
- Register for VAT at the right time
- Choose the best VAT scheme (Standard, Flat Rate, etc.)
- Stay compliant with MTD rules
- File returns accurately and on time
- Reclaim the VAT you’re entitled to
We’ll also help you plan for VAT bills in advance—so you’re never caught short.
Planning for Growth Starts Here
VAT registration is a big milestone—it means your business is growing. But it also means things are getting a bit more complex behind the scenes. That’s where we come in.
At Buzz, we take the faff out of VAT so you can focus on doing what you do best—running your business.
👉 Book a quick call with us today and let’s get your VAT sorted before it becomes a problem.