I would appreciate some guidance on something. One of my clients is currently not registered for VAT but about to go over the threshold within the next two weeks. Ordinarily they would apply to become VAT registered but they are ceasing to trade from 31st December. Is there any way around it?
if they are unlikely to go over the threshold in the future (say for instance it is a one off large sale that took them over or the same instance you are saying-the company is closing) then there is no need to register:
If you've gone over the threshold for registration temporarily
You can apply for exception from registration if:
you have to register for VAT because the value of your taxable supplies in the previous 12 months has exceeded the registration threshold of £79,000 (including the value of supplies made by a VAT-registered business that you have taken over)
you can demonstrate to HMRC that in the longer term you will only be trading below the de-registration threshold of £77,000
You can ask HMRC if they can make an exception, and allow you not to register for VAT, by sending them a letter, stating why you are applying for an exception. The letter should provide evidence and explain why the value of your taxable supplies will not go over the deregistration threshold in the next 12 months.
If HMRC agrees to make an exception and allow you not to register this time, you must let them know of any relevant change in circumstances - for example, if your turnover goes over the threshold again.
If HMRC does not agree to make an exception, you will become registered for VAT from the day you should have been registered. You will need to account for VAT from that date.
Excellent response. These scenarios are becoming more common. But HMRC do not always process them correctly, so you may need to write back to them, and re-state the facts. Be patient!
