When You Need to Register for VAT
You will likely need to register for VAT if you take over or begin a business or corporation in the United Kingdom or Isle of Man. This is true especially if you get goods from other European Union nations to sell in the United Kingdom. However, some services are exempt from VAT, such as loan services, some property transactions, insurance policies, and most educational training and services. You may also be exempt from VAT if you do not meet the taxable turnover threshold.
Taxable turnover is defined as the value of goods and services sold through the business. Basically, taxable turnover is your total income from your business, not just the profit. The current taxable turnover threshold is 64,000 pounds. This means that if your business brings in 64,000 pounds or more annually, you will need to register for VAT. Even if you do not meet the threshold at first, you may want to go ahead and register for VAT if there is even the slightest possibility that you will meet the threshold, to protect you from VAT enquiries in the future.
If you are unsure whether or not you need to register for VAT, you can check with the HMRC, although they will likely try to convince you to register whether you need to or not. If you want real VAT advice, you should probably go to a VAT consultancy firm.