The basic rules on VAT registration are outlined by Richard Curtis.
VAT was introduced just over 50 years ago as a ‘simple tax’; but anyone familiar with its machinations, particularly its exemptions and exceptions, will know this is a misnomer.
However, before we get to other complications, difficulties can arise from the outset. First, a person (an individual or a company) can choose to register for VAT voluntarily. While this means that output VAT must be charged on taxable supplies of goods and services, input VAT will generally be recoverable on business purchases. This may be particularly useful if their supplies are liable at the zero rate or if their customers are also VAT registered and can recover this charge. Note that, usually, input VAT would not be recoverable if this relates to supplies that are VAT exempt.
