If your business turnover has just nudged over the VAT registration threshold and you’re wondering if you’re too late, don’t panic (yet). But do act fast.
Missing your VAT registration deadline can cost you money, time, and a good amount of stress. Here’s what happens, what HMRC expects, and how to fix it if you’re already overdue.
When Do You Need to Register?
As of April 2024, you must register for VAT if:
- Your taxable turnover exceeds £90,000 in a rolling 12-month period (not a calendar year),
–> You must register within 30 days of the end of the month you went over. - You expect to exceed £90,000 in the next 30 days alone,
–> You must register immediately.
What If You Miss That Deadline?
HMRC will consider you late if you didn’t submit your VAT registration within those required timeframes. What happens next depends on how late you are and whether you’ve already raised invoices or collected payments.
Here’s what you could face:
1. Backdated VAT
HMRC will backdate your VAT registration to when you should have registered. That means:
- You will owe VAT on all sales from that date – even if you didn’t charge your customers
- You’ll need to pay it from your own pocket if you can’t go back and reclaim it
Example:
If you should have registered on 1 May 2025 but didn’t, and you’ve invoiced £30,000 since, you might now owe £5,000+ in unpaid VAT.
2. Penalties and Interest
HMRC can charge:
- A failure to notify penalty – based on how late you were and whether it was deliberate
- Interest on unpaid VAT
- Additional fines if they believe you tried to avoid paying
The later you are, the worse it gets – but HMRC does consider mitigating factors.
3. Loss of Credibility
If you have VAT-registered clients, not charging VAT when you should can hurt your professional standing. It may also raise eyebrows during due diligence if you’re seeking funding or selling your business.
What to Do If You’re Already Late
- Don’t ignore it. HMRC penalties increase the longer you wait.
- Get registered now. You can still register online and declare your backdated liability.
- Speak to an accountant. We can help you understand how much VAT you’ll owe, negotiate payment plans if needed, and explain your position to HMRC.
Need Help?
At Crossley & Davis, we’ve helped dozens of business owners who realised a little too late that they should have registered.
We’ll:
- Work out exactly when registration should have happened
- Calculate what’s owed
- Handle the paperwork and HMRC communication
- Support you going forward with returns and VAT planning
Reach out today for a no-stress, confidential chat.
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