Whether you’ve registered for VAT due to exceeding the threshold (£90,000 since 1st April 2024), or you’ve chosen to register for VAT voluntarily, what you need to do is the same once you have received confirmation of your VAT registration.

1. Set up your HMRC VAT account. If you already have an HMRC account, you can add VAT as a tax to your account. If not, you will need to register for an HMRC account for your business. Please note that if you are a business, you need to have an ‘Organisation’ account, not an ‘Individual’ account. (This applies to sole traders/freelancers, partnerships/LLPs and limited companies).
2. Once you have got VAT added to your HMRC account, you will need to connect it to your software. Your software should have a help article on how to do this. You will need to have your VAT number and your Government Gateway login details to do this.
3. You must charge VAT from the date of registration. It is important to understand the rules for invoicing outside of the UK – when VAT applies and when it doesn’t – speak to your accountant if you are unsure. You can set up rules for each contact in Xero and most of the softwares, so this can help ensure you are consistent.
4. Ensure your sales and purchase invoices are valid invoices for HMRC VAT purposes. (we have separate FAQs on these – one for valid sales invoices and one for valid purchase invoices).
5. You will need to send a VAT return to HMRC using compatible software each quarter (or monthly or annually depending on your registration) and pay any VAT owed by the deadline. There are harsh penalties for late filing, and additional penalties for late payment, plus interest is added. Ensuring you meet your filing and payment requirements is crucial when you are VAT registered.
6. If you make a mistake in a VAT return, if the error is under £10,000, you can correct the error and submit it in your next VAT return. If it exceeds £10,000, you will have to notify HMRC. There is more information on how to do this on their website here.