Flashcards in Chapter 14 - Registration Deck (13)
Compulsory VAT Registration
A business must register for VAT if:
1) taxable supplies made in previous 12 months exceeds the registration threshold (£85,000); or
2) if there are reasonable grounds to believe the value of taxable supply made in the next 30 days on their own will exceed the threshold of £85,000
Includes sole trader, partnership, LLP, company or unincorporated associatons
Any business can register for VAT if they like. Business may do this for:
- To recover input VAT
- To avoid late reg penalties
Voluntary Reg Disadvantages
- Output tax is charged on sales liable to standard or reduced rate supply
- VAT accounting - additional compliance burden
Types of Registration
- Historic test
- Future test
- Existing trader
- Intending trader
End of every month, look back at taxable supply for the last 12 months. If the supplies in the period exceed £85,000, the business must register
Historic Test Registration
When threshold is exceeded, HMRC must be notified within 30 days from end of the month in which £85,000 is exceeded.
Business will then charge VAT from the first day of the following month.
Test done every day. If taxable supplies in the next 30 days alone are expected to exceed £85,000, the business must register
Future Test Registration
Must notify HMRC within 30 days from the day it becomes clear £85,000 will be exceeded within the next 30 days.
Business must start charging VAT immediately
Supply of goods or services made in the UK other than an exempt supply.
Dregistration applies where:
- sale of business
- changing status (eg sole trader to company)
- ceasing to make taxable supplies
HMRC must be notified within 30 days. Takes effect immediately
Available where a business is expected to make taxable supplies of less than £83,000 in the next 12 months