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

Zelda Ltd has taxable turnover of £85,000 in the 12 months to 31 March 2027 and expects turnover of £86,000 in the following 12 months. Using the registration and deregistration limits in the ACCA tax tables, which statement is correct?

Zelda Ltd need not register because its taxable turnover of £85,000 is below the £90,000 registration limit and is not expected to exceed it. The £88,000 deregistration limit applies only to businesses already registered for VAT.

  1. AZelda Ltd must register because its turnover exceeds £85,000
  2. BZelda Ltd is not required to register for VAT because its turnover is below £90,000Correct
  3. CZelda Ltd must register because its turnover exceeds the deregistration limit of £88,000
  4. DZelda Ltd must register only if its turnover exceeds £90,000 in any single quarter

Explanation

The VAT registration limit is £90,000. Zelda Ltd's turnover of £85,000 is below it and is not expected to exceed it, so compulsory registration is not required. The £88,000 deregistration limit only applies to a business that is already registered, so it is not the relevant test.

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