If your business turnover is £85,000 or above, you will need to register for VAT. If your turnover is less than £85,000, you can still register voluntarily.
Main Advantages to Voluntary VAT Registration
Customers can Reclaim VAT: You can choose which VAT scheme is suitable for your business, thus reducing your VAT bill.
Businesses can Reclaim Start-up Costs: VAT on assets and services often suffer in the process of starting a business. This can be recovered from HMRC in the VAT return, thereby helping start-up cash flow.
Main Disadvantages to VAT Registration
Accuracy Needed: You must charge the correct amount in VAT.
HMRC Payments: Any VAT due must be paid to HMRC.
Time Consuming: You must submit VAT returns. These can take time to produce.
Extra Records to Keep: VAT records must be kept and a VAT account used.