Commentary

V2.143 Liability to VAT registration—determination of value of taxable supplies

Part V2 Registration – deregistration

V2.143 Liability to VAT registration—determination of value of taxable supplies

V2.143 Liability to VAT registration—determination of value of taxable supplies

Valuation of supplies for the purposes of the liability to register for VAT

This paragraph examines the valuation rules as they apply for the purposes of determining whether a person has a liability to register for VAT under VATA 1994, Sch 1 (ie under the historic or future turnover tests).

UK legislation

In determining whether an unregistered person has become liable to be registered under VATA 1994, Sch 1, the following are omitted from the value of taxable supplies made, namely supplies:

  1.  

    •     of goods and services that are capital assets of the business, unless the supply is the taxable (but not zero-rated) supply of an interest in, right over, or licence to occupy land1 (see 'Capital assets excluded from taxable turnover' below for further details)

  2.  

    •     made by a person under a previous registration, unless that registration was cancelled from the initial date of registration because the person was not registrable, and provided HMRC was given all necessary information to determine whether to cancel the registration2 (for a case in which it was held that HMRC were given all relevant information, see T Dyer3)

  3.  

    •     which are made otherwise than in the course or furtherance of a business4 (see, for example, Marcel Brogden where The Tribunal accepted that the disposal of private assets which were never acquired with the intention of selling them was a non-business and non-taxable activity5)

Before IP completion day, the following supplies were also omitted6:

  1.  

    •     distance sales

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