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ACCA Strategic Professional · Advanced Taxation (UK) · Value added tax

Dunmore Ltd is registered for VAT and wishes to apply for a deregistration. Its taxable turnover for the next 12 months is expected to be £87,000 excluding VAT. Which statement is correct?

Dunmore Ltd may apply to deregister because its expected taxable turnover for the next 12 months, £87,000, does not exceed the £88,000 deregistration limit. The £90,000 figure is the registration limit, and the company does not need to cease making taxable supplies.

  1. AIt may apply to deregister because expected turnover is not more than £88,000Correct
  2. BIt cannot deregister because turnover exceeds the £85,000 limit
  3. CIt must stay registered because expected turnover is below the £90,000 registration limit
  4. DIt may deregister only if it stops making taxable supplies entirely

Explanation

A registered person may deregister if expected taxable turnover in the next 12 months does not exceed the deregistration limit of £88,000. £87,000 is below that. The £90,000 figure is the registration limit, not the deregistration test, and ceasing trading is not required.

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