Don’t let suppliers and landlords push you into VAT registration nor a Limited Company
A common problem that we see are new business start ups unnecessarily forming a limited company or becoming VAT registered.
It should be YOUR choice as a new business start up to make an informed choice as to whether to register for VAT or become a limited company.
Unfortunately, some suppliers and landlords “nudge” people into either VAT registration or forming a Limited Company. Some do it overtly, i.e. saying they’ll only deal with limited companies or VAT registered businesses. Others do it accidentally by inferring those requirements on their application forms, i.e. a box in their online form, asking for VAT registration number or Limited Company number which they’ve set to require an answer and don’t allow it to be left blank.
Most of the time, there is no such requirement and the supplier/landlord will be content to deal with you as a sole trader or partnership, or as a non VAT registered business. They often just “assume” that all businesses will be limited companies or VAT registered, especially if they are based in other countries where either or both really are genuine requirements for trading in their country so they don’t know any different!
Of course, sometimes, you do have to register for VAT (if you fall under the compulsory VAT registration requirements) or you may wish to voluntarily register if it’s beneficial for you to do so. Likewise, it’s often better for various reasons to trade as a limited company.
But please make an informed decision rather than letting your suppliers/landlord “nudge” you into possibly making the wrong decision that may well be detrimental to you.