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ACCA Strategic Professional · Advanced Taxation (UK) · Tax administration and the UK tax system

Quill Ltd has an annual taxable turnover of £82,000 and is voluntarily registered for VAT. It wishes to deregister. Under the ATX-UK tax tables, which statement is correct?

Quill Ltd may apply to deregister because its expected taxable turnover of £82,000 does not exceed the £88,000 deregistration limit. Deregistration is a choice, not compulsory, and the £90,000 registration limit is not the relevant test for deregistering.

  1. AIt may apply to deregister, because expected taxable turnover for the next 12 months is not above £88,000Correct
  2. BIt cannot deregister because its turnover is below the £90,000 registration limit
  3. CIt must deregister, since turnover is below £88,000 and deregistration is compulsory
  4. DIt may deregister only if turnover is below £82,000

Explanation

The deregistration limit is £88,000. A registered trader may apply to deregister where taxable turnover for the coming 12 months is expected not to exceed that limit. Deregistration is optional rather than compulsory, and the £90,000 registration limit is not the test.

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