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ACCA Strategic Professional · Advanced Taxation (UK) · Statutory obligations, time limits and the implications of non-compliance

Gideon is a sole trader with taxable supplies of £86,000 in the last 12 months and is not registered for VAT. Trading is growing, and he expects the next 30 days' supplies alone to be £92,000. Applying the ATX-UK VAT limits (Finance Act 2025), which statement is correct?

Gideon must notify HMRC and register for VAT, because he expects taxable supplies in the next 30 days alone to exceed the £90,000 registration limit. The forward-looking test applies even though his past 12 months' turnover is only £86,000. The £88,000 limit relates only to deregistration.

  1. AHe must register only when his past 12 months' turnover exceeds £90,000
  2. BHe must notify HMRC and register because he expects the next 30 days' supplies to exceed £90,000Correct
  3. CHe may wait until the deregistration limit of £88,000 is exceeded
  4. DHe need not register because he has not exceeded the limit in the past 12 months

Explanation

Registration is required if the historic test is breached or if taxable supplies in the next 30 days are expected to exceed the £90,000 registration limit. The forward-looking test applies here since £92,000 exceeds £90,000. The £88,000 deregistration limit is irrelevant to registration.

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