Confused about VAT registration

**Clare@InTouch** · 28 August 2012, 07:29

You'll need PAYE registration if you're going to pay any wages. VAT isn't necessary unless you go over the limit, but it can be worthwhile if you register for flat rate VAT too. That would enable you to make a small extra profit on your sales, assuming your sales are UK based and you're not making a lot of purchases.

Your accountant should be able to help with both.

**Andrew at Boox** · 28 August 2012, 07:36

Get your accountant to do an estimate of the flat rate vat benefit you'll get, then you can see the extra income that hits your back pocket and gauge whether it's worth it or not. You'll probably need a company bank account to register for VAT.

**Contreras** · 28 August 2012, 10:23

Originally posted by insomniac View Post

What are the respective pros and cons?

Also I just completed the company registration today, so don't have a Corporation Tax reference yet. I presume I will need this to register for both VAT and PAYE?

UTR needed for PAYE registration, but not for VAT registration AFAIK.

VAT pros: extra profit if you also go on the Flat Rate Scheme.
VAT cons: submit a VAT return each quarter (actually very easy if on the FRS).

PAYE pros: you get to draw a salary from the company! (also needed for NI stamp)
PAYE cons: more to understand, also will need to submit P35/P14/P11D annually.

You only need £5564 salary to get your NI stamp and if you received this from permie employment within the same tax year then maybe you could forget about PAYE and just draw dividends. I suggest speaking to your accountant about the best way to extract money from the company in your circumstances.

I think a strict interpretation of the HMRC guidance would mean PAYE registration is required even just for travel and subsistence expenses, although if not taking a salary your accountant might say don't bother.

**insomniac** · 28 August 2012, 10:58

Thank you all for the information - it's very useful. I am considering going with SJD as accountants. They seem to specialise in contractors and have been recommended to me by a friend. Has anybody used them in the past?

Contreras, regarding your post:
- what is UTR and FRS?

Yes - I've been in permanent employment this whole tax year thus far, so fall over the NI threshold. However, I will speak to the accountant regarding the registration.

**Jeremiah@RHJAccountants** · 28 August 2012, 11:05

I agree with all the other accountants that have posted.

If you have an accountant he/she will be able to help and advise you as this should be part of your company set up procedures that many firms offer.

I and many other accountants will talk to there clients and give them calculations on what they will potentially make being on the flat rate scheme and if they are not on it to see if it will benefit them.

Just give your accountant a call and it should all be taken care of

**bless 'em all** · 28 August 2012, 11:40

Originally posted by Contreras View Post

UTR needed for PAYE registration, but not for VAT registration AFAIK.

You need your CRN only to register as a LTD. Your company UTR is needed for PAYE. You'll get a personal UTR (if you've not been informed of one before) once you register for SA (which you will have to do).

HTH

**Contreras** · 28 August 2012, 12:31

Originally posted by insomniac View Post

- what is UTR and FRS?

UTR: Company Unique Taxpayer Reference - the first notice you see of this I think is when HMRC ask you to complete form CT41. Not to be confused with the personal Unique Tax Payer Reference (UTR) you get when registering for personal self assessment (which you will also need to do, btw).

FRS: The VAT Flat Rate Scheme - plenty of threads on here about it.

**insomniac** · 28 August 2012, 14:19

One more question. What's a CRN?

**Contreras** · 28 August 2012, 14:30

Originally posted by insomniac View Post

One more question. What's a CRN?

https://online.hmrc.gov.uk/informati...strationNumber

Confused about VAT registration