Posted on 24/09/2024
Most businesses that have a Valued Added Tax (VAT) turnover of more than £90,000 will need to register for VAT. Also, companies with a turnover of less than this sum have the option to register.
VAT is included in the price of goods and services, and you will need to keep an accurate record of how much VAT is applied to the goods and services you have bought for your business.
Once you have done so, you must report the VAT amount you have charged and paid via a VAT return, which you must submit to HM Revenue and Customs and pay the amount you owe.
However, if you are considering setting up a virtual office, you might be unsure if it is valid for VAT. Read on for the answer.
A virtual office cannot only simplify your business operations, lower its overheads, and provide a prestigious location, but the expenses related to its rental and VAT registration are tax deductible.
According to HMRC, it is eligible under its umbrella of allowable expenses. For example, it could relate to the costs associated with a virtual office space lease, meeting room fees, phone answering services, and more.
However, the above expenses must be for trade purposes only to be tax deductible.
If you have VAT registered your business, you can reclaim a VAT portion of your virtual office rental, as long as it meets specific conditions.
You cannot use a business address for a virtual office when registering for a VAT, as it is prohibited. Also, you cannot use a PO Box, an accountant’s address, or a “care of” address.
However, many virtual offices allow businesses to pay an extra fee for a registered office address.
If you currently run a business from home, you can choose between using your home address or a virtual office for a registered office address.
If you are unsure what a registered address is, it is a suitable address used for your business’s daily activities.
It must be a dependable address for delivering documents to business owners or its directors/shareholders.
You must provide a registered address to Companies House, HMRC, and other governing bodies, as they may need to send letters and reminders to your business.
Choosing a virtual office for a registered business address is a smart decision, as you must pick an address that is regularly available to accept post and sign for documents.
You will have the added benefit of establishing your business in a prestigious location, helping to portray a more professional image.
For example, you could choose a registered address at one of the many virtual offices in Mayfair, London.
As it is a legal requirement to include your registered office address and company registration number on all company stationery, such as invoices, business cards, and letterheads, you will not regret choosing a respected location.
As mentioned, HMRC and other governing bodies require business owners to provide proof of a physical location.
It will confirm all letters, notifications, and reminders will be received when sent, and that you will have suitable time to respond to correspondence, late filings, etc. It ensures HMRC has a physical address it can visit when necessary, too.
You are free to use your home address as your registered office address if you choose, as long as your business is incorporated in the UK.
However, you must remember that registered business addresses can be viewed online by any member of the public, which is why you might want to think twice about using your home address.
A registered office address from one of the many virtual offices in London, Manchester, Edinburgh, or beyond are safer options.
Plus, you can enjoy extra perks by using the service, including mail forwarding, call patching, telephone answering, meeting room hire, and hot desking.
If you want to change your current registered office address or are concerned you may need to in the future, you will be happy to know the process is rather straightforward.
All you must do is use Companies House’s online web filing service to change the address; however, you must notify them within 14 days of the address change.
You will need to provide various details, including your name, the company number, the new registered office address, and a signature.
Companies House will only approve the change if they view the new address as suitable.
There is a big difference between a registered address and a business address, especially for VAT purposes.
A registered address is solely for statutory post from various governing bodies, such as HMRC and Companies House. It must be a physical location that can accept mail and that the body can visit if needed.
A business address is where your suppliers, clients, customers, and others can send correspondence to your company.
Also, you can invest in more than one business address for your companies, and they don’t need to match a registered address.
A registered business address is suitable for registering your company with various governing bodies, such as HMRC and Companies House.
It is a more secure and smarter alternative to using your home address, as it is available for view by the public.
As a result, you don’t need to worry about unwanted guests visiting your home, and you can protect your company’s reputation with a prestigious postcode.
It might be music to your ears to know that the use of a virtual office is tax deductible. It allows you to reduce your company’s overheads while enjoying various tax benefits, especially if you have invested in phone answering, meeting room fees, and much more.
If you have any questions, our friendly team is happy to answer them on 0207 692 0608.
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