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EXCEPTION FROM VAT REGISTRATION


At present the threshold for compulsory VAT registration is £85,000. The threshold for voluntary deregistration is £83,000.

When do I register for VAT?

Usually, if the value of taxable supplies for any 12 month period has gone over the VAT registration threshold, you will be required to register.

When does exception from VAT registration apply?

If you can satisfy HMRC that the value of your taxable supplies will not exceed the deregistration threshold in the next 12 months, you may not have to register. If you can satisfy HMRC that future turnover will not exceed £83,000, you can apply for an exception from registration.

 

How do I apply?

A VAT1 form won’t need not be completed but a request should be made in writing to the Registration Unit. This will need to state turnover figures and the reasons supporting the request. Your Tax Shop in Tameside can do all this for you.

When is exception not allowed?

Where a business exceeds the VAT registration threshold on the forward look, where it is expected that it will exceed the threshold in the next 30 days alone, rather than on the cumulative backward look, then the exception is not allowed.

Whether registering or applying for an exception, the normal 30-day time limit applies for notifying HMRC that you have exceeded the threshold.

What happens once exception is granted?

Once granted the exception from registration, a person does not become immune from a liability to register. This is in respect of the supplies they continue to make. The granting of exception from registration doesn’t form a cut-off date for monitoring turnover. If the exception is granted, you should continue to monitor the value of your taxable supplies on a monthly basis. This is to determine if a further liability arises by exceeding the registration threshold. However, HMRC will not require you to re-apply for the exception where the liability arises because of the earlier one-off contract.

Conditions…

The conditions for applying this concession are that:

  • The turnover in any subsequent month is less than one-twelfth of the deregistration threshold at that time.
  • The trader has no reason to believe that they will exceed the deregistration threshold in the then following 12 months

What happens if the conditions are not met?

If a further liability arises and those conditions are not met, the trader will have to either register or re-apply for the exception.

If you have a VAT query why not contact Your Tax Shop at our Ashton or Mossley offices to discuss the implications?

Speak to one of our friendly tax advisors at one of our offices in Tameside:

Ashton office – 0161 339 5689

Mossley office – 01457 837744