Hi Joanne

No they don't I've looked up the wrong bit sorry - added it below

So the business deregistered for VAT in May as the were under the deregistration threshold. 

I can't seem to work out if they need to stay under 81,000 for the next 12 months in total and under 83,000 rolling total (month by month) OR under £81,000 at any given time (month by month)

Thanks 

3.2 Voluntary deregistration

You can ask for voluntary deregistration if any of the following occur:
you can satisfy HMRC that your taxable turnover in the next 12 months will not exceed the deregistration limit

I am registered because I make relevant acquisitions
5.2 Voluntary deregistration

If then
you are registered because you have previously exceeded the acquisition threshold

but

the value of your relevant acquisitions in the year ending 31 December did not exceed the threshold 81,000

and

the value of your relevant acquisitions in the next year, beginning 1 January, will not exceed the threshold. 81,000 or 83,000? you can apply to cancel your registration.

Hi Joanne

Thanks for your reply. This clients accountant sorted out the de-registration, I'm not sure how or what they did and I've kept out of it. 

I'm going to have a go through the VAT guides this afternoon and see if becomes clearer.

Thanks

Rachel

nooooooo. Relevant acquisitons relate to EU acquisitions. (see Section 7 VAT guide 700/).

Thats why I wanted to check before answering because its maybe  getting ultra complicated when it perhaps doesnt need to. So it would really help if you advise more on if all their sales are taxable supplies and are they all at standard rate or other? Full hotel sales or just like agents commissions involved? Do they provide such sales to the EU members (whom I assume are individuals or via booking companies who may be VAT registered?)

Must go NOW or will be late!!!!!!!!!!!!! Sorry

Hi Rachel
Sorry about that - back now and fully concentrating.

Conversation got confusing earlier as you seemed to be picking up on parts of the VAT guides that are not (or may not be) relevant to your client.

As far as I understand it you have de-registered voluntarily, so you will have no need to re-register unless you get back up to the registration threshold. I would prefer if someone else (yo Les, are you reading this?!) could confirm my understanding as Ive still not waded through the VAT act.

That said if its bubbling between the two limits you could have an issue, especially if you de-reg and then re-reg and they are close together in date as this means HMRC would look more closely at the situation.

Issue remains as to why they de-registerd, so I would suggest you find out from your client (get a copy of the application that went) or speak to the Accountant to find out why and then review it in line with the circumstances that have meant that either that reason was a fib/didnt come to pass or indeed that the business has just recovered (eg winning a new large contract, having taken on a new whizz kid sales chappie or in a new market etc).

If the information in the de-registration letter was detailed and accurate then I dont think they should have an issue. BUT if HMRC have agreed to something on a flimsy information base then they could argue that it was a false de-reg position and then you are into the usual fines/penalties/repayment of output tax due (with the possibility of not being able to claim input tax)

rachel_mclean wrote:

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Hi Joanne, I got that one a bit wrong  sorry I'm always reading the wrong parts!

The sales are standard rate taxable supplies, the business is a hotel and the only income is from guests at the hotel. Before deregistering they were on the flat rate scheme. 

I never got involved with the VAT returns, the client did that with help and advice from his accountant. It was on the flat rate scheme and he worked that out himself. I had nothing to do with it and no responsibility for it. 

The money comes straight into the bank account through online card payments, there is commission payable to the likes of Hotels.com etc. It does not change the sales amounts though, the whole of the income comes through and he is later billed by hotels.com etc for commission. 

I basically just do his bookkeeping in the way he likes it and passes on to his accountant at the end of the year. I have a VAT rolling spreadsheet for him and record the sales every month so that he can keep an eye on his turnover. The business is only open and money is only taken for 7 months of the year.

 

 

 

-- Edited by rachel_mclean on Tuesday 9th of August 2016 03:30:37 PM

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 OMG - what am I like. Despite saying I was fully concentrating before, I didnt see this post at all.  Think that may have been because I started my response and was interrupted by a million and one flippin pings on my phone from a client.  So sorry my response was without the benefit of this one.