VAT registration threshold

Over old threshold in March - HMRC only ask about £90,000 threshold

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Client got in touch to say he had exceeded the £85,000 threshold in March 2024. We checked and his figures were correct.  Applying for VAT registration today (3rd April) and the online application only asks about £90,000 threshold.  This implies that the new threshold is to be applied retrospectively, which does not seem right. What about a client who admits to exceeding the £85K threshold in (let's say) January 2022, but who never exceeds £90,000 in successive 12 month periods. This imaginary client would have been liable to account for VAT from 1 March 2022, but the HMRC application process would tell him he did not need to register. Any thoughts?

Replies (4)

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RLI
By lionofludesch
03rd Apr 2024 11:53

Your proposed EDR is 1 May? Then the new limit applies.

Your second example is spurious, as the trader should have been filling his form in February when the website would have quoted the old limit.

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By Tom+Cross
03rd Apr 2024 15:31

From an earlier experience, if your client has exceeded the threshold, within the period ended 31st March 2024, and hasn't registered for value added tax, they leave themselves open to further, and potentially extensive enquiries, from HMRC, once the SATR has been submitted.
I think this is one of those occasions when some advice, from HMRC, is essential.
I'd suggest a helpline, but they seem as rare as rocking horse ............

Thanks (2)
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By FactChecker
03rd Apr 2024 18:41

There are quite a few assumptions floating around here (irrespective of the predictable pig's ear that HMRC have made in updating their online software ... given this was not exactly an unpredictable scenario).

For starters:
- will exceeding the 'old' threshold be a temporary one-month event?
- is there any reason why client can't apply for voluntary registration?

As is no doubt obvious this is not my sphere, but I'd certainly agree (if registration from 1st May is the plan) that invoices issued from that date should show that VAT will be charged (where appropriate) as soon as the number is obtained.

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By andrewtodd
05th Apr 2024 12:12

From https://www.gov.uk/register-for-vat

If you go over the threshold temporarily
You can apply for a registration ‘exception’ if your taxable turnover goes over the threshold temporarily.

Write to HMRC with evidence showing why you believe your VAT taxable turnover will not go over the deregistration threshold of £88,000 in the next 12 months.

HMRC will consider your exception and write to confirm if you get one. If not, they’ll register you for VAT.

Presumably this applies when the threshold changes.

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