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VAT Registration hypothetical


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Perhaps some of you could help settle a discussion I was having with a colleague.

A business has recently hit the VAT registration threshold in the course of trade in March - as such they register for VAT with the effective date of 1st of May.  No VAT is due on invoices prior to effective date of registration.  Does this mean that in April they could theoretically invoice out up to £84,999 of work without charging VAT on it?

Colleague argues that the above must not be possible as it would certainly breach a registration rule, I can't find any specific rule and believe that it's just one of those situations where it's such a specific and unlikely situation that HMRC saw no need to make a rule against it barring the £85,000 within a single 30 day period rule.

Again - purely theoretical and just to settle an argument.  I know why it would be a bad idea and don't plan to concoct some hare-brained avoidance scheme on the back of this which will only hold water until such time as HMRC happen to look at it.

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By Les Howard
21st Mar 2019 14:58

Yes, the one month grace allows the trader to make any value of supplies in the intervening month. But the future turnover rule may apply if at any time up to and during that month he expected the value of his supplies to exceed £85k in the next 30 days; this would override the historic turnover rule.
And, no, please don't concoct some hare-brained avoidance scheme!

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Replying to leshoward:
By Jdopus
21st Mar 2019 15:30

That's what I thought Les, thank you.

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