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

Tara Ltd makes only standard-rated supplies and is not currently VAT registered. Its taxable turnover for the last 12 months has been £91,500. Using the registration limit in the ACCA Finance Act 2025 tax tables, which statement is correct?

Tara Ltd must notify HMRC and register for VAT, because its taxable turnover for the last 12 months of £91,500 exceeds the £90,000 registration limit. The £88,000 figure is only the deregistration limit and does not decide whether a business must register.

  1. ATara Ltd must notify HMRC of liability to register, because taxable turnover for the past 12 months exceeds £90,000Correct
  2. BTara Ltd need not register, because the limit is £88,000 and only applies on deregistration
  3. CTara Ltd may choose to register, because registration is voluntary until turnover exceeds £100,000
  4. DTara Ltd must register only if turnover is expected to exceed £90,000 in the next 12 months

Explanation

The registration limit is £90,000. Taxable turnover of £91,500 for the past 12 months exceeds it, so the company has a liability to register and must notify HMRC. The £88,000 figure is the deregistration limit, not the registration test, so the second option is wrong.

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