Commentary

V2.147 Exemption from VAT registration

Part V2 Registration – deregistration

V2.147 Exemption from VAT registration

V2.147 Exemption from VAT registration

Exemption from VAT registration—turnover expected to fall below deregistration limit

Persons do not become liable to registration under the provisions relating to historical turnover (see V2.135 and V2.137) if HMRC is satisfied that the value of his taxable supplies in the period of one year, beginning at the time at which they would otherwise become liable to registration, will not exceed the prescribed deregistration limit (currently £83,000)1. For past prescribed registration limits, see 'UK taxable supplies—deregistration' in Tax tables and checklists.

Persons who wish to claim exemption from registration under this provision need not furnish Form VAT 1 provided that they notify HMRC (the electronic registration service may be used) within the appropriate period2. The electronic registration service may be used for these purposes.

It seems that a person who fails to notify a liability to register at the appropriate time and subsequently seeks retrospective exemption has limited chances of success as is illustrated by the cases of Property Trade Services3 and Michael Robert Haynes4.

Difficulties may arise if the anticipated fall in turnover does not materialise, see, for example the case of Roy Victor Evans T/A Britannia Services5.

Exemption from VAT

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