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If all supplies are exempt should they still register for VAT?

If all supplies are exempt should they still...

Client supplies ambulance services which are exempt from VAT.  If they go over the registration threshold do they still need to register for VAT?

One of there customers has asked for a VAT exemption certificate, what is this and where would they get it?


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17th May 2012 18:03

No & Don't know

No - if all the services you supply are exempt from VAT, you cannot register for VAT.

Don't know what a VAT exemption certificate is or why a customer should ask for one.

Thanks (1)
By Hansa
17th May 2012 20:57

VAT exemption certificate

Like Euan McLennan, I've never come across a VAT exemption certificate, but I may be able to provide a clue, particularly if the OP's client sells abroad (inside the EU).  

The UK is, I think alone, in not requiring everyone except micro-businesses to register for VAT (In Germany and a number of other countries) you are required to register for VAT at the time of incorporation.  In certain other countries (Malta for example), after exceeding a very small threshold (€6,000 I think) but below €12,000 one can register "without credit" meaning you get a VAT number but can reclaim nothing (and don't need to charge VAT on sales).  One might ask 'why?', but that's another question.  However EU based businesses on being told by a UK business "we are exempt from registering for VAT" might be very likely to say "Well, lets see the certificate to prove it then" as it would be beyond their comprehension that a "proper" company might not have, need or even be allowed to have a VAT registration number.

To answer the OP (and if the above is the case), perhaps a two line letter from the relevant VAT office stating "the company is not registered, and on current information, need not/can not register for VAT" would suffice.


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By zebaa
17th May 2012 22:45

A VAT exemption certificate is a letter issued by HMRC to say they have considered the case ( using information supplied by the none-VAT-taxpayer ) and the entity does not have to be VAT registered. The reason a customer might ask for this may be for several reasons. Most likely in this case is that VAT registration is a 'badge' that most firms have and is an indication the firm is not some fly-by-night or a tupence 'apenny outfit.

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