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VAT registration issues

VAT registration > VAT deregistration > VAT registration

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I was thinking about this a few years ago but because of my dispute with an ex-client I thought about it again. 

There's a level where you have to register for VAT - £85k per year - but what is the situation if your fees stay the same and you calculate the VAT as inclusive in your fees. This would put your net fees below the amount in which you are able to de-register. When you de-register then your fees are above the amount you need to register!

What is your solution? Unless you change the amount of work you do or change your prices you would just be in a never ending circle of register, de-register and then register again!

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By Paul Crowley
20th Sep 2020 13:57

Deregistration is on VAT taxable turnover. Gross, just like registration

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Replying to Paul Crowley:
By petersaxton
21st Sep 2020 10:02

What do you mean? "Gross"?
VAT registration and de-registration is calculated according to turnover excluding VAT.

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RLI
By lionofludesch
20th Sep 2020 15:20

Yes - it's been like that since 1973.

The legislation envisages everyone adding VAT to their fees/sales/whatever but it doesn't always work like that.

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