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Failure to register for VAT

Failure to register for VAT

I have just received all of my new clients paperwork and after going through it all he has at the least turned over £754 above the VAT registration threshold or at the most £2,184 above the threshold (I am waiting for him to confirm a couple of transactions)

He would have been unaware of this and of course the time to register has lapsed so was wondering what I should now do?  Should I register him for VAT seeing as the previous 12 months turnover was above the threshold yet this year will not be?  I am confused as to what to do.

Thanks for your help in advance.

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09th Aug 2012 23:02

I should mention that I am aware that HMRC states that for the previous 12 months turnover the current threshold is £77k but of course the year in questions the threshold was £73k hence the confusion.  

If I go by what it currently says on the HMRC website then I don't think it matters however, if he realised in the year that he was going to go over £73k then he would have registered.

I hope that makes sense and some one can clarify

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09th Aug 2012 23:50

A couple of questions

During which month and year did your client go over the threshold?

Was this your clients first financial year, and if not is it possible that some of the receipts were incorrectly recorded and related to debtors from the prior year, I ask only because it is so close?  Or if it was indeed the clients first period, was the period slightly longer than 12 months?

Regards

MtF

 

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09th Aug 2012 23:09

Confused

seems to be a popular word these days.  Quite why people admit to it is beyond me,

The rules are quite clear.  If you exceed the threshold,  you register. Why would your client have been "quite unaware?"   Apart from negligence that is,

He must register fromt the correct date.  If there was something at that date that would have proved that the increase in turnover was temporay he might, just might, have claim that he shouldn't have needed to register

 

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10th Aug 2012 06:55

The client should apply to register

but after applying they can ask to not be registered if they can show it is only temporary.

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10th Aug 2012 08:33

I have ad success with writing to HMRC, exaplaining the circumstances, and the fact it was a tempoary blip!

 

See

http://www.hmrc.gov.uk/vat/start/register/when-to-register.htm

"You can apply for exception from registration if:

you have to register for VAT because the value of your taxable supplies in the previous 12 months has exceeded the registration threshold of £77,000 (including the value of supplies made by a VAT-registered business that you have taken over)you can demonstrate to HMRC that in the longer term you will only be trading below the de-registration threshold of £75,000"

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10th Aug 2012 11:25

Thanks for all your replies although my query still exists.

The confusion was because as MAWALLACE stated from HMRC;

"you have to register for VAT because the value of your taxable supplies in the previous 12 months has exceeded the registration threshold of £77,000 (including the value of supplies made by a VAT-registered business that you have taken over)"

Yet for my client this is not the case.  His turnover is £73,754 so I was not sure whether you go by the threshold in the relevant year (£73k) or the current HMRC site information.

I have spoken with them now and clarified the situation.  He went over the threshold by £754 in January 2012 so I am going to apply for an exemption.

Thanks for your advice!

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10th Aug 2012 12:49

Not likely

"His turnover is £73,754 so I was not sure whether you go by the threshold in the relevant year (£73k) or the current HMRC site information."

I don't think you would go by the current situation else everybody would wait until past turnover was less than future registration limits.

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11th Aug 2012 12:15

While it is the threshold at the time of the breech you need to look at, not that currently in force, how quickly did he go back under.

 

In my case, it was only three months when he should have been registered, which was a one off blip. As soon as HMRC was happy that this was the case, they agreed to the exemption to regisiter.

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