If you own your own business and you are getting closer to the VAT threshold which requires that you sign up for it, you may well be getting nervous about that fact. VAT is a double edged sword in a sense – it is good that you are bringing enough in to warrant paying it in the first place. But it is also nerve wracking because you have a fresh lot of paperwork to do every three months.
It pays to start thinking about VAT before you reach the point where you need to register. Since it is worked out on a rolling year it isn’t just a question of thinking about whether you are over or under the threshold every time we go into a new tax year. You need to think about it on a monthly basis. This means it pays to keep fully up to date with your accounts – particularly if you know you are sailing close to the threshold amount itself.
The more you know about your financial situation in business, the better you will be able to prepare for the potential of applying to be VAT registered. Of course some businesses apply straightaway regardless of what they may be bringing in. Your own individual situation may vary though, so do make sure you get proper professional advice if you are just thinking of starting out and you want to know whether you should join or not.
The important thing to remember is that nerves are fully understandable. They are also the key to helping you figure out what you are nervous of. Is it something unknown? Is it something you have always had nerves about? What about the fear of getting things wrong?
In short it is the act of getting to the bottom of your fears that enables you to think about tackling them in the right way. For example you should be willing to think about why you are nervous about VAT if you want to reach the point where you won’t be nervous any more. Most people find they are simply nervous because they don’t know what to expect. It is exactly the same with anything new.
So don’t worry too much about VAT. Once you get close to the threshold you can start finding out more about it and giving yourself the knowledge you need to get everything right.