I'm self-employed and run a business. From my research online, it seems all business incomes from different streams count towards the VAT registration threshold. What I can't seem to understand is whether income from a UK investment counts towards this. The investment income is taxed at source and is included on my self-employed tax return. I would think it is separate and part of non-included income in regards to VAT, but now I'm not so sure.
Arthur replies:
UK ‘investment income’, like interest or dividends you receive, does not count towards the VAT registration threshold. VAT registration is based on your VAT-taxable turnover (broadly, everything you sell that is not exempt), and investment returns are either exempt financial services or outside the scope of VAT, so they’re excluded from that total. See HMRC’s guidance: www.gov.uk/how-vat-works/what-vat-charged-on.