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ACCA Applied Skills · Taxation (UK) · The VAT registration requirements

Darnell, a sole trader, is VAT registered. His taxable supplies in the 12 months to 31 March 2027 were £86,500, and he expects taxable supplies in the next 12 months to be £85,000. Using the deregistration limit of £88,000, which statement is correct?

Darnell may apply to deregister because the deregistration test looks at expected taxable supplies in the next 12 months, and £85,000 is below the £88,000 limit. Deregistration is optional, and the £90,000 registration limit is not the relevant test.

  1. AHe may apply to deregister because expected taxable supplies for the next 12 months are below £88,000Correct
  2. BHe must deregister because past supplies were below the £90,000 registration limit
  3. CHe may not deregister because expected supplies are below £90,000
  4. DHe may not deregister because a trader must remain registered for at least three years

Explanation

A registered trader may apply to deregister if taxable supplies in the next 12 months are expected to be £88,000 or less. Expected supplies of £85,000 are below this limit, so he may apply. Option C uses the registration limit instead of the deregistration limit. Deregistration is voluntary, not compulsory, so B is wrong.

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