VAT Threshold Question

jamesnp

Hi there,

I'm a sole trader and I'm not VAT registered currently as it's a startup business and I was below the services threshold of €37,500 p.a. last year, and I assumed I would be this year too.

It's now looking like I may have a turnover of more than €37,500 this year (yey!). What is the situation if registering for VAT in the middle of the year? Does VAT become payable on all my invoices of the year, or just the invoices issued after the date of VAT registration? If it's the former, is the best course of action to just stop working @ 37,500?

Cheers,
JP

nompere

VAT only applies to invoices issued after the registration date.

Do note that the registration date is usually the 1st day of the VAT period in which you register. The next VAT period will start on 1 July, so you should file your TR1 around then, and hold off on any invoices until you have your registration number.

jamesnp

Great stuff, thanks for that.

In that case, would I be better holding off registering as long as possible?

-jp

nompere

It's mandatory to register at the point when it's apparent that turnover for a twelve month period is going to exceed the threshold.

If I'm looking at this for someone, I reckon that the point is reached when monthly turnover is consistently over €3,000, unless there are exceptional variations.

jamesnp

Ok, better register now so!

Thanks again for your help.

Beir bua,
JP