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VAT Registration "Exception"

Can a one-off event qualify for a registration exception?

VAT is not my forte, so hopefully someone with more experience can tell me if I’m barking up the wrong tree.

I will have a client (unincorporated association or Ltd company – vehicle hasn’t been decided yet) who will be running a one off event – providing a testimonial match for a player.

In total, the venture will last about 3 months from start to finish. An independent committee will organise the match and receive payments for the tickets. The match takes place in September, and between now and then there will be tickets sold (although the match hasn’t been announced yet, so no ticket sales yet – pay at the gate may be quite high here).

Turnover for the match is expected to be around £150k, so above the VAT threshold.

Chances are the VAT threshold will be breached within a 30 day period, and so immediate registration will apply.

I’m aware that you can apply to HMRC for a registration exception if your taxable turnover goes over the threshold temporarily, and you have evidence to show you believe taxable turnover won’t go over the de-registration threshold of £83,000 in the next 12 months.

Given tickets aren’t available for sale yet, it could very well be that all sales go through in the 30 days leading up to the match – in fact most might actually go through on matchday. So, after matchday, no further turnover will be received, but there will be a bit of admin to complete – payment to the player, filing of any necessary returns, distribution of remaining funds etc. All finished within say a month of the match.

Given that we can demonstrate that there will be no taxable turnover in the next 12 months, in your opinion, is there any chance of HMRC granting an exception in this case?

I personally doubt we can - for one how can it temporarily go over the threshold, if it exceeds it with its only event - but thought it worth getting other opinions.

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25th Jun 2018 12:18

I suspect you will be obliged to register under the future turnover rule. Once the event is over, and you cease to make taxable supplies, you will be obliged to deregister.
But you cannot apply for an exception under these circumstances.

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25th Jun 2018 12:41

Not possible.
https://www.legislation.gov.uk/ukpga/1994/23/schedule/1
Exception is given by (3):-
(3)A person does not become liable to be registered by virtue of sub-paragraph (1)(a) or (2)(a) above if the Commissioners are satisfied that the value of his taxable supplies in the period of one year beginning at the time at which, apart from this sub-paragraph, he would become liable to be registered will not exceed £xxxxx

The next 30 day rule is under (1)(b). Therefore (3) isn't available.
These 'one off events' are IMO exactly why the next 30 day rule exists.

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25th Jun 2018 12:51

Thanks to both of you for the quick responses.

I suspected that would be the case.

On the bright side it is an extra fee for us if they want us to do the VAT returns.

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25th Jun 2018 16:21

Dear Lone Wolf

If I were you I would give it a go and request a registration ‘exception’ which means you don’t need to register for VAT. This is something you must actively apply for – it’s not sufficient to do nothing and argue the case later.

To apply for permission not to register, you must write to HMRC and explain the circumstances. You’ll need to provide good reasons why you shouldn’t have to register, which may mean:
• Demonstrating that crossing the VAT threshold on this occasion is a one-off event; and
• Showing why there’s no likelihood that the threshold will be exceeded in the foreseeable future
• You’ll need to provide documentary evidence to support your arguments.

HMRC will consider your application and confirm in writing if you are excepted from registration. If they reject your case, the business will have to be registered for VAT.

Even if your application for a VAT exception is accepted by HMRC, it’s important to remember that it’s a one-off rather than a continuing exclusion. If your circumstances change and your turnover again exceeds the VAT threshold, you’ll need to register for VAT (or apply for a further exception).

There is no harm applying for the exception (you can get once off fee from client for saving him the hassle re VAT) and perhaps increase sales for the tickets (if without VAT)

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to Jupiter Accountants
25th Jun 2018 18:14

Jupiter-Accountants.com wrote:

Dear Lone Wolf

If I were you I would give it a go and request a registration ‘exception’ which means you don’t need to register for VAT. This is something you must actively apply for – it’s not sufficient to do nothing and argue the case later.

.........

There is no harm applying for the exception (you can get once off fee from client for saving him the hassle re VAT) and perhaps increase sales for the tickets (if without VAT)

[email protected]
I’m looking for subcontractor work!!

Sorry, absolute rubbish.
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