What must a business do if it exceeds the VAT registration threshold?

When a business exceeds the VAT registration threshold, it is required to register for VAT. This means the business must start charging VAT on its taxable sales. The VAT registration threshold is set by tax authorities and is an annual turnover limit. Once a business's taxable turnover exceeds this threshold within a specified period, it becomes liable to register for VAT.

By registering for VAT, the business can reclaim any VAT it has incurred on its purchases and expenses, which can be a significant benefit. This registration also serves to ensure compliance with tax regulations and maintains transparency in business operations. If the business fails to register for VAT when required, it may face penalties and enforcement action from tax authorities.

Operating without changes or stopping sales would not address the compliance requirements imposed by exceeding the VAT registration threshold. Seeking an exemption from VAT is not a viable option since exceeding the threshold typically necessitates registration rather than exemption. Hence, registering for VAT and charging VAT on sales is the correct course of action.