When should I register my hair business for VAT?

Hello fellow entrepreneurs!

Starting your own hair business is such an exciting journey, isn’t it? Whether you’re specialising in bleach, extensions, wolf cuts, or all of the above, it’s easy to get caught up in the thrill of it all. But today, I want to chat about something that might feel a bit overwhelming at first …VAT registration.

When should I register my hair business for VAT?

Now, I get it, the word ‘VAT’ can sound a bit scary, and the idea of registering might seem like something to delay for as long as you can. But knowing the right time to register is super useful, and it can actually give you peace of mind knowing you’re on the right track.

So, when should you register?

In the UK, you need to register for VAT if your taxable turnover in a 12-month period goes over £90,000. That means if everything you earn from your hair services and products, before any VAT is added, hits that figure, then you’re legally required to register.

What if you’re not there yet?

Don’t worry, there’s no need to rush. If your turnover is below that threshold, you’re not obliged to register yet. But it’s wise to keep a close eye on your earnings because it’s only a matter of time before you hit that limit, especially if your business is growing fast.

But what if I expect it to go over the limit soon?

Great question! If you anticipate your turnover will exceed £90,000 in the next 30 days, you should actually register within 30 days of that point. It’s better to be proactive so you’re not caught out.

And why should you register early?

Apart from legal requirements, registering for VAT can have some benefits, like increasing your professional credibility and sometimes even allowing you to claim back VAT on business expenses. However, it also means you’ll need to do VAT returns and charge VAT on your services, so it’s important to weigh up the pros and cons.

I hope this clears things up a bit! Remember, VAT registration isn’t a ‘one size fits all’ thing – it depends on your business growth and your plans. If you’re ever in doubt, chat with an accountant or a VAT expert, they’re real life-savers!

Until next time. If you’ve got any questions, I’m just a message away!

Emily

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