[Nursie]

There is a financial incentive to do so, you charge VAT at 20% and you pay it at 14.5%.

I.E. I do £100 of work, I charge £120 and pay the government 0.145 * 120 = £17.4

Further, for the first year, you get to pay at 13.5%, £16.20 in the example, effectively boosting company revenue by 3.8% for the first year, and 2.6% thereafter.

[new299]

Specifically I was talking about the situation where your clients are outside the EU and you wouldn't be charging them VAT anyway.

If you are working with UK clients I'd imagine it's most likely in your interests to be VAT registered.