A client (sole trader) has exceeded the VAT reg threshold of £85k, with turnover of c.£100k. However, 75% of this total is VAT exempt services (private dance and gym tuition to children), therefore not a "taxable supply" for VAT purposes. There are also zero-rated supplies, but this makes up the minority of the sales. Client also needs to submit Self-Assessment Tax Return and asked whether HMRC may investigate on the basis he is not VAT reg with a turnover over £85k, albeit majority exempt supplies.
Does the client need to submit VAT1 to get an exemption? The VAT1 form box for exemption refers to "zero-rated supplies" which is different to Exempt supplies so I assume a VAT1 is not needed. Can anyone confirm the right approach? Thank you.