Help, please!
New client company should have registered for VAT in early July 2013 because a single one-off sale (£135,000) exceeded the registration threshold. I believe the 30 day look forward rule applies. Registration is now almost 9 months late.
Turnover in the preceding 12 months is £22k, and in June 2013 would be expected to be no more but in fact looks likely to be around £15k. Is exception restricted to the rolling 12-month test? Or has anyone had success with an application for exception under similar circumstances?
I've been pouring over the VAT notices; pretty sure the margin scheme scheme can be used as supplier used the margin scheme (retrospectively?)
Ignorance is no defence, but client thought invoicing a US address meant sale was outside scope of VAT. The delivery was in the UK.
Do we get on and register urgently within 9 months to attract the lowest 5% penalty or send an application for exception and wait it out?
Replies (6)
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Late registration for VAT
Register urgently, and go for a low/zero penalty.
The reports of Appeals against late registrations in such cases is not hopeful. HMRC and the Tribunal tend to look at the position on the day the large order was received, and consider the taxpayer's state of mind, and legal duty, at that time. The subsequent fall in turnover cannot help him.
Do, of course, apply for deregistration if that is appropriate.
Do the lot
I'd apply for deregistration and exception now. With a bit of luck, they'll be sympathetic - especially if the trader is nowhere near the threshold apart from the exceptional transaction.
You stand a good chance
of getting HMRC to agree that the company did not need to register because at the normal date for registration there were good grounds to say that turnover would not exceed the deregistration limit in the next 12 months.
The key part of that is that is was known at the date that they should have registered. Other cases where the turnover just happened to fall would not qualify for this exemption in retrospect.
We had a case similar to the OP a few years back and they accepted that registration could be waived.