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Where Taxpayers and Advisers Meet

Possibly going over the VAT threshhold

jtufty
Posts:38
Joined:Sun Jan 13, 2013 12:51 pm
Possibly going over the VAT threshhold

Postby jtufty » Tue Apr 09, 2024 9:33 am

Hopefully a quick/easy question to answer, and Im asking because Im erring on the side of caution because I think I know what the answer is:

For the past year Ive been trading at under the £85k threshold. However, this week I may have to invoice for work which will take me up to £87k.

Am I right in thinking this is fine because the new VAT threshold is now £90k? Or do I need to wait until May before I can go above the £85k mark?

Thanks

Trevor S
Posts:110
Joined:Tue Jan 01, 2019 12:37 am

Re: Possibly going over the VAT threshhold

Postby Trevor S » Tue Apr 09, 2024 6:24 pm

For VAT registration purposes, you need to consider your taxable turnover over the past 12 months at the end of each month. So if both 01/04/2023 - 31/03/2024 is below £85k, and 01/05/2023 - 30/04/2024 is below £90k, then you don't have to register. Obviously you need to continue to monitor the position in future months.

Remember that "taxable turnover" can mean more than just income. For example, if you buy services from an overseas supplier, the cost of those services might also count towards the limit. See section 2.3 of HMRC's notice 700/1: https://www.gov.uk/government/publications/vat-notice-7001-should-i-be-registered-for-vat/vat-notice-7001-should-i-be-registered-for-vat#basic-principles - or this extract from their internal manuals, which I think is actually a bit clearer: https://www.gov.uk/hmrc-internal-manuals/vat-registration-manual/vatreg02300

jtufty
Posts:38
Joined:Sun Jan 13, 2013 12:51 pm

Re: Possibly going over the VAT threshhold

Postby jtufty » Tue Apr 09, 2024 7:23 pm

Ah great, thanks for clarifying that Trevor. "... you need to consider your taxable turnover over the past 12 months at the end of each month" this is an important nuance Id failed to pick up on.


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