Any person who makes taxable supplies (i.e. that which is taxed at either the standard, lower or zero rates of VAT) but does not meet the conditions for compulsory registration is entitled to register voluntarily for VAT. Eligible individuals might make the choice to register for VAT for a variety of reason, such as improved cash flow or to project a more influential status.


However, most taxable persons are registered for VAT not for voluntary reasons but because they have triggered the conditions set for compulsory registration. There are two different conditions which must be reviewed to establish whether registration is required for a person receiving taxable income. The conditions are:-


    • At the end of any month if the value of a person’s taxable supplies in the past 12 months exceeded the annual VAT threshold or


    • At any time if there are reasonable grounds for believing that the value of a person’s taxable supplies in the next 30 days will exceed that annual VAT threshold (VATA 1994, Sch. 1, para. 1(1)).





If a threshold is exceeded, notification has to be made and any exemption applied for. Exemption can still be applied for even if notification was late but, following Shephard (1986) 2 BVC 208, 121, it will only be granted if:-


    • The annual threshold is not exceeded and


    • A reasonable body of commissioners would, at the time, have granted exemption having reached the conclusion that the taxable supplies in the year would not have exceeded the annual limit.





The VAT threshold announced in the 2007 Budget and operative from 1st April 2008 is £67,000. The value of the threshold usually increases annually in the Budget, and the government has pledged that the UK’s VAT registration threshold will remain one of the highest in the EC as a spur to the growth of small business.


30 Day Notifications


Notification must be made within 30 days of the end of the 12-month period in which the annual past threshold was exceeded. Although there is no published concession extending the 30-day time-limit, in Lowinger Partners (1987) 3 BVC 1,324, indications were given by a Customs officer that HMRC might exercise their discretion and not assess in cases where the failure to notify was less than three months late.


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