Your responsibilities if registered for VAT

by Aitch, posted in Value Added Tax

It is important to understand both when VAT registration is required and the ongoing obligations that follow. The VAT registration threshold is currently £90,000 of taxable turnover, although businesses below this level can choose to register voluntarily.

Once VAT registered you must ensure you meet your required responsibilities. Businesses must charge VAT on their sales, known as output VAT, while also incurring VAT on most purchases, referred to as input VAT. In practice, VAT-registered businesses act as a collector on behalf of HMRC, charging VAT to customers and paying it over periodically.

The amount payable to HMRC is the difference between output VAT and recoverable input VAT. Where input VAT exceeds output VAT, a refund may be due. However, it is important to note that not all input VAT is recoverable, and care should be taken to ensure claims are valid.

Having a VAT registration also brings with it a number of administrative responsibilities. As a VAT-registered business you must:

  • Include VAT in the price of all goods and services at the correct rate.
  • Keep records of how much VAT you pay for things you buy for your business.
  • Account for VAT on any goods you import into the UK.
  • Report the amount of VAT you charged your customers and the amount of VAT you paid to other businesses by sending a VAT return to HMRC. This is usually done every 3 months but there are other options available.
  • Pay any VAT you owe to HMRC.
Source:HM Revenue & Customs | 30-03-2026
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Aitch
I'm Aitch, the Founder and CEO of CIGMA Accounting Ltd. As a Chartered Management Accountant and as a CIMA member, I've spent more than 16 years helping businesses, entrepreneurs, landlords, and individuals with tax planning, accounting, and HMRC compliance. As a chartered accountant in London, I'm passionate about making complex tax matters easier to understand and helping clients make confident financial decisions. Over the years, I've advised start-ups, SMEs, established companies, and high-net-worth individuals across a wide range of tax and accounting matters. My expertise includes Corporation Tax, Self-Assessment, Capital Gains Tax, Inheritance Tax planning, R&D tax relief, capital allowances, international tax, and resolving complex HMRC compliance issues. Whether clients need a business accountant, tax accountant, or strategic tax advisor, my focus is always on delivering practical advice that creates long-term value. One of my specialist areas is Making Tax Digital (MTD). I've worked extensively with businesses preparing HMRC's digital reporting requirements, helping them move to cloud accounting, improve financial processes, and adopt technology that makes compliance more efficient. I regularly speak at Making Tax Digital roadshows, industry events, and educational sessions in collaboration with Zoho Books, sharing practical insights into digital accounting, tax legislation, and the future of the profession. Many business owners looking for the best accounting firm in London are not simply searching for an accountant they're looking for trusted advice, responsive support, and long-term value. That's the approach I've taken in building CIGMA Accounting. My team and I work closely with businesses across London and the UK, providing accounting services, tax advisory, bookkeeping, payroll, VAT, company accounts, and strategic tax planning tailored to each client's goals. Through this website, I share practical guidance on UK taxation, Making Tax Digital, HMRC updates, Corporation Tax, Self-Assessment, and business finance. My aim is to provide reliable, straightforward information that helps business owners understand changing regulations, reduce compliance risks, and make informed financial decisions with confidence.
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