I was self employed until a year ago, after which I became a full time employee, but still release an app or two now and then on the Apple app store which brings about £3-5k/year, so I still do self assessment. I do buy equipment (mainly new phones for development) for this work and I was reading on the HMRC website how you can reclaim the VAT of business purchases if you are VAT registered. However, I can’t find any information about what that exactly means in respect to app store income – Apple receives and remits the appropriate tax for each region and I don’t even see it in financial reports.
So, the first question is, can I even do a VAT registration?
The second question, even if I can, would I want to?
Thanks in advance,
You are not required to register for VAT as your business turnover is below £85,000. However uou can register voluntarily for VAT. You must pay HMRC any VAT you owe from the date they register you. For small business selling to the public there is usually no advantage of registering voluntarily given the VAT administration costs- filing returns, penalties if not done properly, accountants’ fees etc.
However there’s no threshold if neither you nor your business is based in the UK. You must register as soon as you supply any goods and services to the UK (or if you expect to in the next 30 days). This is meant to catch foreign suppliers like Chinese sellers on Ebay or App sellers making millions from UK buyers yet most UK sellers have to add VAT to their sells.