Labels Who Manufacture Physical Products
If you are a UK-based label and you manufacture physical releases you will, in almost all cases, be better off registering for VAT. This will enable you to claim back the VAT you are charged on your manufacturing costs.
As a VAT registered company will also have to charge VAT on the eligible goods and services you sell, keep accurate financial records and file a quarterly VAT return with HMRC.
All businesses can register for VAT voluntarily. There is no minimum turnover requirement. However, there is a threshold at which you must register your business for VAT.
Labels Who Turnover More Than £81,000/year
If your label reaches the VAT threshold (at the time of writing this is £81,000 over any 12 month period) you are required to register for VAT.
Considerations for VAT Registered Labels
As Kudos generates financial documents on your behalf, it is essential that you inform us if your VAT status or other company details change.
More information about VAT registration is available from the HMRC website. Your accountant should be able to advise you on whether VAT-registration is appropriate for your business.