Mandatory threshold: £90,000 taxable turnover in any 12-month period – monitor this closely to register on time.

Voluntary registration: Available if turnover is below £90,000, useful for reclaiming input VAT or enhancing credibility with clients.

Making Tax Digital (MTD): All VAT-registered businesses must use MTD-compatible software like Xero or QuickBooks to submit returns digitally.

VAT rates: Standard rate is 20%, with reduced rates (5%) or zero rates for certain goods and services – check HMRC guidance for your industry.

Registration process: Apply online via HMRC's website, providing business details, turnover estimates, and bank information.

Effective date: Registration is backdated to when you exceeded the threshold or from a chosen future date for voluntary cases.

VAT returns: Typically due quarterly, including details of sales, purchases, and VAT owed or reclaimable.

Records: Keep digital records for six years, including invoices, receipts, and proof of transactions for HMRC inspections.

Flat Rate Scheme: Optional scheme simplifying VAT calculations for small businesses with turnover under £150,000 – consider if it suits your model.

Penalties: Late registration, returns, or payments can result in fines, so proactive planning is crucial.