Commentary

V7.334 Zero-rating—voluntary registration

Part V7 Tax planning
Part V7 Tax planning | Commentary

V7.334 Zero-rating—voluntary registration

Part V7 Tax planning | Commentary

V7.334 Zero-rating—voluntary registration

A business making wholly (or mainly) zero-rated sales may benefit from registering for VAT on a voluntary basis. Voluntary registration is available to a business that makes taxable supplies below the compulsory VAT registration limits.

The advantages of registering for VAT on a voluntary basis are as follows:

  1.  

    •     the business will not suffer a competitive disadvantage on its sales because no output tax will be charged if supplies are zero-rated

  2.  

    •     the business will be able to reclaim input tax on costs and overheads, which will produce a reduction in its total expenditure and therefore an improvement

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