If you have made a claim against any type of business insurance policy, one of the questions that will be asked is whether or not you are VAT registered.
You do need to think very carefully about this, because it is going to affect your claim by 17.5% or whatever the VAT rate increases to in the future. We know it is easy to answer the question, because you either are, or you are not, VAT registered.
The reason for thinking carefully is, where you VAT registered at the time of the loss? A lot of businesses start off small and through natural growth get to the stage of their turnover increasing. Once you get to the threshold for VAT, then this has a serious affect on your business.
Not only do you have the process of going through quarterly VAT returns. You have to attune your mind to thinking about prices with and without the 17.5%.
If you make an insurance claim and you are VAT registered, then you will find that your claim will have 17.5% removed from the eventual settlement cost. This is because you can offset this against your VAT return so that you do not lose out.
But, if you were not registered at the time of the loss, but are now, do not whatever you do, declare it because you will not get the full settlement costs you are due.