What are the two separate tests for compulsory registration?
Historic turnover test and future turnover test
What does turnover for VAT registration purposes compromise of?
Taxable supplies
What do taxable supplies for vat turn over include :
Include all taxable supplies standard reduced zero but excludes output tax and exclude sales on capital assets
What is historical test?
The trader looks back at the business for the last 12 months and can see if the total exceeds the registration threshold of £90,000
HT - What happens if the trader exceeds the registration threshold of 90,000?
Notify HMRC within 30 days of the end of the month in which turnover threshold is succeeded
Registration is effective from the first day of the second month after turnover exceeds a fresh hold
HT - what happens if a trader exceeds the threshold as a one off?
If tax will supplies for the next 12 months are expected to be less than the deregistration threshold of 88,000, they won’t need to register
What is future test?
Liability to register also arise if taxable supplies within the next 30 days alone are expected to exceed the registration threshold of £90,000
When can you apply for a future test?
Any time, not just at the end of the month
When must HMRC be notified regarding future tests?
Before the end of the 30 day period registration will be effective from the beginning of the 30 day period
How many registrations can an individual trader have?
Only one and this includes all the sole trade of businesses that the individual carries on
What happens if registration if all the partners involved have multiple partnerships together?
All of the businesses will fall under one single VAT registration
What happens if a trader makes zero rated supplies only?
They can apply for exemption from registration however this would mean they cannot recover their input tax
When is an exemption likely to be applied for regarding zero rated car
If the trader does not want the administration burden of complying with the VAT regulations or they do not have much input tax to recover
Why is it important to know the VAT registration date?
To know that the output VAT is currently charged and input VAT is correctly accounted for in the first VAT return
What is the normal allocated tax period for filing returns?
Every three months and usually fits in with their accounting year end, but the trader can request a particular return period
What changes must be notified HMRC?
Changing name trading name or address, partnership members, agency details, bank account details, change in business activity
What happens if you don’t notice HMRC with changes done?
A penalty may be charged 
How do you notify if I HMRC have a change?
Either online or by post
What are the two consequences if a trader does not register for VAT when the businesses turnover exceeds?
Will the VAT is at the trader should have charged from the date they should have registered it is payable to HMRC, a penalty can be charged which is a percent of the VAT due
What choice do the traders have on calculate in the VAT that they should have charged?
Treat sales as all inclusive and suffer the vat themselves OR add vat to invoice and try to recover costs from customer
Can you still register even if you’re not required for VAT
Yes, provided their making or intending to sell taxable supplies
What are the advantages of a voluntary registration?
Avoid penalties for late registration, can recover input VAT on purchases and expenses, can disguise a small size of the business
What are the disadvantages of VAT?
Business would have to comply with a VAT administration rules which may take time away from running the business, business must charge VAT making goods more expensive
When is compulsory deregistration?
When a business ceases to make taxable supplies
