Avoid VAT Registration

As a small business selling to individual consumers you will be acutely aware of the VAT registration threshold which has been frozen at £85,000 until at least 31 March 2022. But what happens if you temporarily exceed that threshold?

If you exceed the threshold but you expect your VATable sales to be less than the deregistration threshold of £83,000 in the next 12 months you can ask HMRC for an exception to VAT registration. We can help you with this but there is no time to waste; you must contact HMRC within 30 days of exceeding the £85,000 threshold. HMRC must be satisfied that the spike in turnover was a genuine one-off situation which will not be repeated.

If your turnover has exceeded the VAT threshold for a longer period and you have not registered for VAT there is no alternative but to register and incur the late registration penalty. We can help you minimise this penalty by providing HMRC with calculations of the VAT due before they ask. In this case your late-registration error will be categorised as careless and the penalty could be reduced to zero.

If your 12-month turnover has already dropped below £83,000 we can ask HMRC to treat your period of VAT registration as ending on the date your annual turnover fell below that threshold. This will also reduce any late-registration penalty.