I have a client that de-registered for vat as they went under the threshold for vat and were expected to stay under for 12 months.
But I have just checked the last 12 months t/o and they are above the vat threshold again.
I have been trying to find guidance on this, but to no avail.
My questions are:
When checking the turn over for the vat threshold, is it still checking back over on a rolling 12 month period, because I have read that you only check from the date of de-registration, which could mean less than 12 months in my case?
Also when doing the calculation for the turnover, part of the months I'm checking they were vat registered, so do I take the turn over figure net of vat or including vat for these months?
Just called HMRC they say that it would still be the turnover for the rolling 12 month period that needs to be looked at. Regardless of the de registration that was in Feb 19.
I replied to you on the AAT forum and disagree with what HMRC have said, I believe the clock resets and starts again after de-registration
So you were the source of 'where it wouldnt be'?
Just wasting our time? Of course the bit we dont know - was the de-registration valid, given where things are now?
As has been said a million times - never ever ever ever ever believe HMRC minimum wage call handlers, who just spout what they think, as opposed to the law (VAT act!!)
-- Edited by Cheshire on Wednesday 21st of August 2019 11:03:51 AM
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Doug I saw your reply on aat forum, I don't trust the vat helpline as it's not in writing.
Joanne, I'm going to write to HMRC so they have it in writing and then I should have a response from them in writing too. Why?
Surely the facts are the facts.
Firstly - in your opinion what exactly is the VAT act saying, or have you not considered/read this?
Once you have considered the above then surely all you need to consider are the facts as they pertain to your customer.
Why did they de-reg/on what basis did they de-reg ie what did they say to HMRC re turnover? What was their trade? What was the reason for the anticipated decrease? What is the reason that the turnover has subsequently started to increase again?
Can HMRC challenge the legitimacy of the de-registration. This is KEY!!!!!!!!!
Without being rude there is abolsutely no point asking the question of fellow professionals and then completely ignoring what they say, unless of course you can put forward a valid argument to state said folk are wrong. Dont get me wrong, I absolutely dont mind folk saying Im talking sh*te (as I often do, although not generally about tax if I can avoid it!) and Im sure Doug wouldnt mind me saying - we would rather be challenged, rather than just wasting our time!
-- Edited by Cheshire on Wednesday 21st of August 2019 05:44:12 PM
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
If you didn't restart the turnover calculation from the day of de-registration lots of people would still find themselves over the threshold in the first month of de-registration because of the 11 months before by using the rolling 12 months, voluntary de-registration is available where a business is expected to make taxable supplies in the next 12 months of less than £83,000 nothing to do with the previous 12 months hence why I believe what HMRC told you is wrong.
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Doug
These are only my opinions of how I see things and therefore should not be taken as advice
If you didn't restart the turnover calculation from the day of de-registration lots of people would still find themselves over the threshold in the first month of de-registration because of the 11 months before by using the rolling 12 months, voluntary de-registration is available where a business is expected to make taxable supplies in the next 12 months of less than £83,000 nothing to do with the previous 12 months hence why I believe what HMRC told you is wrong.
Except if you provided false information/figures or the original legimate expectation of a decrease did not occur, surely Doug?
Evidence being key.
Otherwise everyone would de-reg, leave it a bit and reg again.
Which is one reason you have to supply a previous VAT reg number to HMRC.
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
If you didn't restart the turnover calculation from the day of de-registration lots of people would still find themselves over the threshold in the first month of de-registration because of the 11 months before by using the rolling 12 months, voluntary de-registration is available where a business is expected to make taxable supplies in the next 12 months of less than £83,000 nothing to do with the previous 12 months hence why I believe what HMRC told you is wrong.
Except if you provided false information/figures or the original legimate expectation of a decrease did not occur, surely Doug?
Evidence being key.
Otherwise everyone would de-reg, leave it a bit and reg again.
Which is one reason you have to supply a previous VAT reg number to HMRC.
Totally agree, but I was answering on the basis that the de-registration occurred for valid reasons but as you say HMRC could well challenge this and could well expect VAT to be accounted for going back to the de-registration date if they thought that the client was trying to evade VAT.
What has the turnover been since the de-registration date? this might give some indication
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Doug
These are only my opinions of how I see things and therefore should not be taken as advice
