I'm a sole trader providing services to the general public. I am not currently registered for VAT. I had been below the VAT threshold of €37.5k, but trade has increased in the last 6 months and I am confused about the VAT threshold with respect to the Revenue's statement:
"Value-Added Tax (VAT) registration is obligatory when your turnover exceeds or is likely to exceed the VAT thresholds. The thresholds depend on your turnover in any continuous 12 month period."
For the past 12 months (May 2019 - May 2020) I have not exceeded the threshold. However, if my next 6 months is the same as the past 6 months I will exceed it.
So, I have some questions:
Does the above mean I need to register and charge VAT shortly before I reach the threshold and then return VAT from that point? Or am I required to register and return VAT now? When is it best to register? If I register now, will I be liable for VAT for the past 6 months (even though I hadn't registered / charged VAT)?
Secondly, as I supply services directly to customers, an increase of 23% is really significant and I am concerned this will reduce trade a lot. If I register and charge VAT and then it turns out I don't reach the threshold, where do I stand? Do I need to refund customers the VAT or just submit return to Revenue anyway?
The information on Revenue and Citizens Information is really not specific so any advice would be hugely appreciated.
Thank you very much!
"Value-Added Tax (VAT) registration is obligatory when your turnover exceeds or is likely to exceed the VAT thresholds. The thresholds depend on your turnover in any continuous 12 month period."
For the past 12 months (May 2019 - May 2020) I have not exceeded the threshold. However, if my next 6 months is the same as the past 6 months I will exceed it.
So, I have some questions:
Does the above mean I need to register and charge VAT shortly before I reach the threshold and then return VAT from that point? Or am I required to register and return VAT now? When is it best to register? If I register now, will I be liable for VAT for the past 6 months (even though I hadn't registered / charged VAT)?
Secondly, as I supply services directly to customers, an increase of 23% is really significant and I am concerned this will reduce trade a lot. If I register and charge VAT and then it turns out I don't reach the threshold, where do I stand? Do I need to refund customers the VAT or just submit return to Revenue anyway?
The information on Revenue and Citizens Information is really not specific so any advice would be hugely appreciated.
Thank you very much!