Voluntary VAT Registration: What You Gain (and Risk)
- JAFA Accountancy
- May 28
- 3 min read
You can still register voluntarily if your turnover is below the VAT registration threshold. However, before you do, knowing the upsides and trade-offs is worth knowing. Here's a quick look at why some businesses register early, and whether it makes sense for you.
Key Takeaways
You can register for VAT even if your turnover is below the £90,000 threshold.
Voluntary VAT registration benefits include reclaiming expenses and boosting credibility, but come with more admin and could affect your pricing.
It’s only worth it if it fits your customers, costs, and growth plans, not just because it sounds professional.
Should You Register Before You Have To?
You can register for VAT even if your turnover is below £90,000, but should you?
It might be worth it if:
You mostly work with VAT-registered businesses (they can reclaim the VAT you charge).
You spend a lot on equipment or services with VAT (you can claim it back).
You’re growing fast and will hit the threshold soon.
You want to appear more professional.
But think twice if:
Your customers are individuals as they’ll end up paying more.
You don’t have many VAT-related expenses.
You want to avoid extra admin like filing VAT returns.
In short: it’s smart for some businesses, but not all. It depends on your setup, customers, and plans for growth.
What You Gain from Voluntary VAT
If you're under the threshold but considering registering anyway, here’s what you stand to gain:
Claim Back VAT on Expenses
You can reclaim VAT on equipment, software, rent, and more - great if you have high startup costs.
Look More Professional
A VAT number can make your business seem more established, especially if you work with bigger clients.
Win More Work
Some companies only hire VAT-registered suppliers, so voluntary registration could open doors.
Prep for Growth
If you expect to hit the threshold soon, registering early can make the shift smoother.
Cleaner Records
VAT registration forces you to stay on top of your finances, which helps long-term.
What You Risk or Lose
Registering early has its downsides too:
You’ll Have to Charge VAT
This can make your prices higher for customers who aren’t VAT-registered like individuals or small clients.
More Admin to Handle
Quarterly VAT returns, keeping records, and staying compliant means more time (or cost if you hire help).
Cashflow Can Get Tricky
You collect VAT for HMRC, so that money isn’t yours, even if it’s sitting in your account.
Mistakes = Penalties
If you get the numbers wrong or miss deadlines, HMRC can fine you.
Not sure if voluntary VAT is right for you? Many small business owners say “Being VAT registered is killing my business” because they signed up without fully understanding the impact. Book a FREE CALL with one of our experts and get clear, no-pressure advice tailored to your business.
What We Think
We’ve seen voluntary VAT registration work well for businesses selling to VAT-registered clients or spending a lot on VAT-inclusive costs. But for those serving individuals or with little to reclaim, it often adds admin without real benefit.
The system doesn’t make this decision easy, and it’s not always clear how it’ll impact your pricing or cash flow. If you're unsure, don't guess. Speak to someone who knows how it’ll affect your business specifically.
How JAFA Can Help
Not sure if VAT registration is right for you? We’ll help you figure it out with advice tailored to your business, not one-size-fits-all rules.
If you decide to go ahead, we’ll handle the entire process: registration, choosing the right VAT scheme, filing returns, and making sure you stay compliant without the stress.
We can also help you complete your voluntary registration for VAT form, and guide you through exactly what to include.
Still unsure? Book a FREE CALL with us - we’ll talk through your options and help you make the best decision for your business. No jargon, no pressure.
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