2. VAT Registration

Question 1

What is the current VAT registration threshold?

Answer 1

£85,000

Question 2

What transactions ARE included in taxable turnover for VAT registration purposes?

Answer 2

Turnover from all taxable supplies which includes standard-rated, reduced-rated and zero-rated supplies.

Question 3

What transactions ARE NOT included in taxable turnover for VAT registration purposes?

Answer 3

VAT (what would have been charged if VAT registered), sale of capital assets and exempt supplies.

Question 4

What is the historical turnover method?

Answer 4

At the end of the month look back over the last 12 months if taxable turnover exceeds VAT threshold

Question 5

Using the historic turn over method, how long does a business have to register for VAT?

Answer 5

They have 30 days form the end of the month they exceed the threshold to notify HMRC and they will then be registered with effect from the first day of the second month after the turnover was exceeded or an agreed earlier date.

Question 6

What is the future turnover method?

Answer 6

If, at any time in the month, there are reasonable grounds for believing that within the next 30 days taxable supplies will exceed the threshold. (This would in most cases be getting a getting a large order that will cause your business to grow significantly in a short period of time.)

Question 7

Using the future turn over method, how long does a business have to register for VAT?

Answer 7

They have until the end of the 30 day period and will be registered
form the start of the 30 day period.

Question 8

How long do you have to notify HMRC about changes to your registration details?

Answer 8

30 Days

Question 9

What changes to your VAT registration details do you have to notify HMRC about?

Answer 9

Changes to:
- Business address
- Business nature
- Bank account details
- Business name

Question 10

What is the deregistration threshold?

Answer 10

£83,000 (always £2,000 less than the registration threshold)

Question 11

What is compulsory deregistration?

Answer 11

If a company stop making taxable supplies they must deregister by notifying HMRC with 30 days and they will be deregister from the date they stop making taxable supplies or an agreed upon alter date.

Question 12

What is voluntary deregistration?

Answer 12

If taxable turnover in the next 12 months is likely to be bellow deregistration threshold.

Question 13

How long do VAT records need to be kept for?

Answer 13

6 years