Recently begun acting for client company who has received a compliance letter from HMRC suggesting that they should have been registered for VAT.
Details of turnover as follows (with VAT registration limits - lowest during year) - year end is 30/9. HMRC figures to 2010.
2005 58355 (58000)
2006 60114 (60000)
2007 61255 (61000)
2008 72105 (64000)
2009 63635 (67000)
2010 70439 (68000)
2011 65123 (70000)
The company provides maintenance and management services to major landlords who are not VAT registered. The company has deliberately tried to stay below the VAT limit to avoid registration (but failed on occassions!) as it's customers would be unable to claim VAT back and it would become uncompetitive and lose business.
My instinctive answer is to initially argue that at each time the VAT registration level was breached the company had a reasonable expectation that it's turnover would fall back below the registration levels and therefore it didn't need to register.
Any thoughts would be appreciated.