VAT registration Limit

marion

I have just got a new client he deals in fresh vegatables and has a turnover of £858K previous accountants states he did not need to be VAT registered, my understanding is the if you go over the VAT limit even if you are deal with vegatables which are zero rated you need to be registered for VAT

Thomasl1

From the HMRC website, hope this helps......



If most or all of the goods and services you supply are zero-rated
If most of your supplies are zero-rated, you may be able to apply for exemption from registration.

You can apply for an exemption from VAT registration by filling in a VAT registration form, stating why you are applying for an exemption from VAT registration. If some of the supplies you make are VAT taxable you must also show that the VAT you would reclaim on your purchases would normally be more than the VAT you would charge on your sales.

If HMRC agrees you can be exempt from VAT registration, you must inform HMRC of any relevant change in circumstances - for example, if you no longer sell mainly zero-rated goods or services.

If HMRC don't give you an exemption, you will become registered for VAT from the day you should have been registered. You will need to account for VAT from that date.

AK002

Why would you not want to be VAT registered if your sales are zero rated?

That means any VATable expenses he inccures he can claim back the VAT - rent, petrol/diesel, packaging costs etc.

Without any further info i'd say it's benificial for him to be VAT registered.

Thomasl1

I agree totally.

mc25

I agree with AK, this could work out to his own benefits if he is vat registered.

marion

Further on

Thanks for your help, the problem is that if that this client should have been registered for expemtion several years ago because of his turnover, my problem is if I register him now and back date the VAT registration there will be problems with HMRC

AK002

If HMRC back date the registeration and he has never had taxable sales he won't have anything to pay surely? If anything he will receive money from HMRC?