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:

Advantages

  • 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

Disadvantages

  • 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.
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