If you're contracting is mostly remote and outside the UK, you don't need to register, or charge VAT (as I understand it).
I.E. I do £100 of work, I charge £120 and pay the government 0.145 * 120 = £17.4
Further, for the first year, you get to pay at 13.5%, £16.20 in the example, effectively boosting company revenue by 3.8% for the first year, and 2.6% thereafter.
If you are working with UK clients I'd imagine it's most likely in your interests to be VAT registered.
AFAICT most VAT on everyday expenses doesn't come back to you.
OTOH you can charge the company for your lunch every day, which means you get that paid for before corporation tax, income tax or anything else...
Hmmm. I think my last accountant told me things like lunch every day were not billable to the company. But they weren't very good accountants. :)
I didn't realise it was only spends over 2K that could be claimed back. Do you have a reference for that?
Overall, VAT registration didn't seem to offer me much (given that my clients are all outside the UK) but I'm curious to know if there are circumstances where it might make sense.
Best I can find on VAT in a ten-second search is this -
Sections 15.1 and 15.2 are where you'll want to look.
Oh, and the overview section from this much simpler guide :)
This £2K thing probably does only apply to companies on flat-rate schemes.
The idea is that for a small business, the overheads of processing all the VAT refund stuff are just too large, so you give relief on large purchases only, and the income boost I mentioned in the other post is probably supposed to make up for it. Or something. I don't claim to fully understand!