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ACCA Strategic Professional · Advanced Taxation (UK) · Tax advantages and disadvantages of alternative courses of action

Hollis Ltd is VAT registered and wishes to deregister voluntarily. Its taxable turnover for the next 12 months is expected to be £87,000, and it will make no further taxable supplies of the kind that would take it over the limit. Using the ACCA Finance Act 2025 tax tables, which statement is correct?

Hollis Ltd may apply to deregister, because its expected taxable turnover of £87,000 for the next 12 months is below the £88,000 deregistration limit. Deregistration is a choice requiring an application to HMRC, not an automatic outcome.

  1. AIt may apply to deregister, because expected turnover is below the £88,000 deregistration limitCorrect
  2. BIt cannot deregister, because expected turnover is below the £90,000 registration limit, not above it
  3. CIt may deregister only if expected turnover is below £85,000
  4. DIt must deregister automatically, because turnover is below £88,000

Explanation

Voluntary deregistration is available where expected taxable turnover for the next 12 months does not exceed £88,000. £87,000 is below this, so Hollis Ltd may apply. Deregistration is not automatic, as the trader must apply, so the last option is wrong.

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