You must register for VAT when your turnover reaches £85,000 in any 12 month period. VAT registration must take place 30 days, following the end of the month in which the threshold was reached in which to register. From that date you must charge VAT to your customers and then you can claim VAT back on your costs via your VAT Return. There are pros and cons to being registered. If your clients are VAT registered they can reclaim the VAT charged, but if they are not VAT registered businesses, it means they effectively have to pay 20% more for your services because they will not be able to reclaim VAT.
