Commentary

V7.141 VAT registration—the 'VAT trap'

Part V7 Tax planning
Part V7 Tax planning | Commentary

V7.141 VAT registration—the 'VAT trap'

Part V7 Tax planning | Commentary

V7.141 VAT registration—the 'VAT trap'

Many businesses that have traded below the VAT registration limit will be faced with a dilemma when they increase their sales to the point when they may need to be VAT registered. In basic terms, the question that all businesses will need to consider is: should I expand my business and register for VAT, even though my profits could reduce by being VAT registered? Or should I restrict my level of activity by trading just below the VAT registration limits (the barrier to growth referred to by the Office of Tax Simplification)?

See Example 8 for

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