These days there are a lot of entrepreneurs starting up small businesses in the hopes of either providing the world with some new and cool innovation or just to make money. With appropriate resources and funding, startups can develop into full-fledged companies offering various products for people around the world. But size doesn’t matter in the end when it comes to paying taxes, as everyone has to do it. For convenience’s sake, many international businesses apply to do them through a proper VAT registration service, like www.1stopvat.com. But how do you know when you need to register for it.
When is it a must?
There are a few things that tell that a company should apply for VAT. These are:
- If your taxable turnover for any consecutive 12-month period exceeds the specified threshold.
- If the business is already registered. But there is a way to test if you need to do so by calculating the taxable turnover over the before mentioned period and adding it to the turnover of the business your buying. If it exceeds the threshold, you’re obliged to register.
- If you think your taxable turnover will exceed the threshold in the next 30 days.
Doing these taxes is much easier with such companies like www.1stopvat.com, which offer a VAT registration service.
Many small businesses and start-ups have a turnover that’s under the threshold but still chose to apply for this. This decision to opt-in comes down to the particular business and the personal preferences of the owners. There are some advantages to it though, such as:
- You can reclaim some of the VAT. This applies to the goods and services purchased by the company that are needed in order to run the business.
- Once you reach the turnover, you don’t need to register for it again. This saves a lot of time and the hassle of adjusting your prices to include the additional VAT rates.
Those small companies that want to preemptively apply can do so through www.1stopvat.com as they offer a VAT registration service.
Properly doing taxes is necessary for every business as it’s required by law. Choosing to ignore them can lead to not only financial troubles, but legal issues as well. It’s strongly advised to do proper bookkeeping and closely monitor if they pass the VAT threshold.