From my understanding, if you are permitted to and choose not to register for VAT:
- You do not add VAT to the prices you charge to customers.
- You do not have the right to reclaim VAT on business expenses.
However, how does this work with business customers?
Normally, if a business customer is registered for VAT, they will try to reclaim VAT on purchases from you. However, this doesn't make sense in this situation.
Do businesses you interact with have to know if you are registered for VAT or not and act accordingly? Must they simply not try to reclaim VAT when you are not registered for VAT?