True or False: Limited companies must register for VAT if their annual taxable turnover exceeds a specific threshold.

Limited companies are indeed required to register for VAT if their annual taxable turnover exceeds a specified threshold, which is set by tax authorities. This requirement ensures that businesses contributing to the economy through sales of goods and services also participate in the tax revenue system. The threshold is updated periodically, and it reflects the minimum turnover at which businesses are obligated to charge VAT on their taxable sales.

When a limited company reaches this threshold, it must register for VAT, collect VAT from its customers on behalf of the government, and pay VAT on its purchases. This obligation applies universally to all limited companies, regardless of the nature of their business activities, such as selling goods or providing services, making the statement true. Those that do not exceed the threshold can choose to register voluntarily in order to reclaim VAT on their purchases, but this is not a requirement.

Other choices do not accurately describe the VAT registration requirements. A limited company's obligation to register is not contingent on providing services or specific company structures like being a close company; it solely depends on exceeding the annual taxable turnover threshold.