For businesses with a turnover of under RI million a year, registration for VAT is optional: you don't have to register as a VAT vendor, but you may if you want to. Here are some pros and cons:
- A VAT registration number makes your business seem more established and professional.
- If your business is cash intensive and your suppliers are charging VAT then you can claim that VAT back
- It is a lot more admin as you need to submit and file your VAT returns every 2 months. This usually requires an accountant.
- Paying the bi monthly VAT can cause cash flow issues. VAT is due the moment you send an invoice, even if you only get the money at a later stage.
- You will need to charge VAT on your invoices which makes your product/services more expensive.