VAT Registration can take up to ten weeks for Revenue to process. They may or may not have questions during the process. If you know you are going to hit the thresholds during your financial year, register early.
Get your VAT number processed.
If you have business expenses that have VAT included, once registered, these can be reclaimed in your VAT returns. When paying VAT on sales, you may have an option of the ‘cash receipts basis’ or ‘invoice basis’.
As you raise invoices when you are registered for VAT, you will charge your customers VAT. If you register for a cash receipts basis of VAT returns, you will PAY VAT to revenue once your business has received payment from customers. Once a threshold of €2m sales is breached, a business can not use the cash receipts basis and must register for invoice basis, which will mean the company pay VAT to Revenue as they raise invoices (unless they use the pro-forma method of raising invoices).
Rather than get into technical issues at this stage, the main point to understand and focus on is to review your numbers throughout the year and ensure you know if you will breach the VAT thresholds. Project forward and look at your sales pipeline and the value of sales that will arise in the coming months to do this exercise.