If you’re starting a business that involves regulated financial activities in the UK, one of your first big questions might be: “Do I need to be VAT registered to apply for FCA authorisation”. It is a question our team often get asked and the short answer is: No. Being VAT registered is not a requirement when applying for authorisation from the Financial Conduct Authority (FCA). Many new businesses and startups apply for FCA authorisation while operating below the VAT threshold, so not having a VAT number won’t affect your FCA application.

When is VAT necessary

VAT only becomes relevant in two scenarios, one If you expect your business to generate a significant number of revenue after authorisation which would mean you’ll likely reach the VAT threshold (currently £90,000 a year). So, while VAT is not a requirement during the point of applying for FCA authorisation, if you hit the threshold during the process you may need to register to remain compliant with HMRC rules.

The second scenario where you may need to be VAT registered is if you plan to work with a lender or a broker. Both lenders and brokers generally require you to be VAT registered for them to work with you. This is because lenders often set it as an onboarding rule to ensure they are working with reputable and established businesses.

To summarise – You do NOT need to be VAT registered for FCA authorisation. But other circumstances may require it.

If you have any further questions don’t hesitate to contact us:

Email us: support@thecomplianceguys.co.uk

Call us: 01792 926 040