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An MSC only has to register for VAT if the value of its taxable supplies is over a specific limit, unless the supplies are wholly or mainly zero rated, in which case an application for exemption from registration can be made. From 1 April 2017 the new VAT registration threshold is £85,000..

A Company may voluntarily register for VAT even if the value of its taxable supplies is below the specific limit; however that is a choice for the company.

HMRC operate a Flat Rate Scheme which simplifies VAT accounting by applying a flat rate to VAT-inclusive turnover. »Ê¹ÚÌåÓýapp scheme is available to businesses whose annual taxable turnover (not including VAT) does not exceed £150,000. However, any MSC wishing to use the scheme must demonstrate that it is not associated with another business before its application can be accepted.

»Ê¹ÚÌåÓýapp flat rates are calculated as an average of the net VAT paid by a particular trade sector. As MSCs do not adhere to a normal sector profile, HMRC may refuse use of the scheme in order to protect the Exchequer.