VAT Threshold Query

[JagXJGuy]

The VAT threshold is £85000 per year, so my understanding from what I've read is that upon looking back at the last 12 months takings month on month, if the total exceeds £85000 then you must register for VAT.

I have a very small business which I and my business partner co-own and work in, we employ no staff just ourselves self employed. As its such a small shop we don't plan on employing staff and there is definitely a ceiling as to what we can turnover, as we close up shop for holidays, time off etc.

Looking back at the last 12 months the turnover looks to be circa 65k, so still a fair bit under the threshold.

As the business is quite seasonal in takings, if I project the next 12 months to turnover say 80k tops, but if we were to take 9k one month, 4k the next month so forth is that ok so long as the overall total is under 85k for the year?

A peak summer month would see you over the 85k limit if you took that months takings and did x12 (say 9k x 12 =108k)
But in reality the quieter months might be 4.5k turnover (so 4.5k x 12 = 54k)

Jan -0k closed holidays
Feb -5k
Mar -6.5k
Apr -6k
May -7k
June -8k
July -8k
Aug -9k
Sep -7k
Oct -7k
Nov -6k
Dec -5k

Total £74500 turnover as an example

Would this pattern be ok so long as its under 85k?

Many thanks!

[chml]

The VAT threshold is in in a 12 month rolling period so as per HMRC - You must register if:

your total VAT taxable turnover for the last 12 months was over £85,000 (the VAT threshold)
you expect your turnover to go over £85,000 in the next 30 days

[JapanRed]

JagXJGuy said:

The VAT threshold is £85000 per year, so my understanding from what I've read is that upon looking back at the last 12 months takings month on month, if the total exceeds £85000 then you must register for VAT.

I have a very small business which I and my business partner co-own and work in, we employ no staff just ourselves self employed. As its such a small shop we don't plan on employing staff and there is definitely a ceiling as to what we can turnover, as we close up shop for holidays, time off etc.

Looking back at the last 12 months the turnover looks to be circa 65k, so still a fair bit under the threshold.

As the business is quite seasonal in takings, if I project the next 12 months to turnover say 80k tops, but if we were to take 9k one month, 4k the next month so forth is that ok so long as the overall total is under 85k for the year?

A peak summer month would see you over the 85k limit if you took that months takings and did x12 (say 9k x 12 =108k)
But in reality the quieter months might be 4.5k turnover (so 4.5k x 12 = 54k)

Jan -0k closed holidays
Feb -5k
Mar -6.5k
Apr -6k
May -7k
June -8k
July -8k
Aug -9k
Sep -7k
Oct -7k
Nov -6k
Dec -5k

Total £74500 turnover as an example

Would this pattern be ok so long as its under 85k?

Many thanks!

You are correct and your scenario above would be fine.

[JagXJGuy]

JapanRed said:

You are correct and your scenario above would be fine.

Thank you for clarifying! Can make my money in the summer and take some well needed time off in winter when its quiet...