VAT is obligatory for businesses whose turnover exceeds £85,000 per year. However, there are some benefits to registering your company for VAT on a voluntary basis.
There is an alternative scheme called the Flat Rate Scheme which, prior to April 2017, produced an even higher recovery of VAT. However HMRC have introduced a new category for limited cost traders, which means that in most cases the flat rate scheme no longer produces a better financial return than the standard scheme (although it does still have the advantage of being simple to operate).
Apart from the financial benefits, being registered for VAT can help promote your business, presenting an image of a large, professional and well established organisation.
Read: VAT Explained