Was I suppose to register for VAT before I started trade? I have been showing VAT rate on my invoices.?

It is illegal to charge VAT if you are not registered for VAT. You should either: 1) Come clean to HMRC and they will register you and make arrangements for any VAT you have charged to be paid to the revenue (it's a tax, that's where it belongs); or 2) With your small turnover, if you do not want to be registered, you should refund the VAT you have charged to people and keep accurate records that you hae done so. You must do one or the other, because if you have charged VAT, at least some of your customers will be VAT registered and have the opportunity to claim it back - and when they do, the HMRC will realise that they never got it in the first place.

If you are not registered for VAT you would seem to have committed fraud by adding VAT to your customer's accounts. You cannot take something from customers allegedly on behalf of the government with no means of passing it onto the government

You are committing fraud.

You should quote your VAT reference on your invoices to be legal.

If you've been charging your customers VAT but not passing this on to the Inland Revenue, this is a fraudulent (and therefore criminal) offence. If you're unsure whether you should be VAT registered (and therefore whether you should be charging your customers VAT and then passing this on to the Inland Revenue) and you're unsure based on the online information available, contact an accountant to advise you as to what you need to do. I hope you sleep well tonight....

You don't need to register yourself to pay vat unless your annual turnover is expected to be over £66000 for the forthcoming year. You shouldnt be charging your customers VAT full stop but it is illegal to take VAT from them and not declare it to HMRC.