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B10: VAT registration

Compulsory registration of UK business: supplies have or will exceed registration threshold

 

"(1)     Subject to sub-paragraphs (3) to (7) below, a person who makes taxable supplies but is not registered under this Act becomes liable to be registered under this Schedule—

(a)     at the end of any month, if the person is UK-established and the value of his taxable supplies in the period of one year then ending has exceeded [the registration threshold]; or

(b)     at any time, if the person is UK-established and there are reasonable grounds for believing that the value of his taxable supplies in the period of 30 days then beginning will exceed [the registration theshold]" (VATA 1994, Sch 1, para 1(1))

Registration threshold

1 April 2017 to present: £85,000

UK established

"(10)     A person is "UK-established" if the person has a business establishment, or some other fixed establishment, in the United Kingdom in relation to a business carried on by the person." (VATA 1994, Sch 1, para 1(10))

Take account of supplies before person UK-established

"(2A)     In determining the value of a person's supplies for the purposes of sub-paragraph (1)(a) or (2)(a), supplies are to be taken into account (subject to sub-paragraphs (3) to (7)) whether or not the person was UK-established when they were made." (VATA 1994, Sch 1, para 1(2A))

Taxable supplies: supplies in the UK other than exempt supplies

"(2)     A taxable supply is a supply of goods or services made in the United Kingdom other than an exempt supply." (VATA 1994, s.4(2))

Supplies wrongly thought to be exempt

"As explained in Business Brief 28/04, taxpayers will not usually be required to register in respect of previous supplies they had treated as exempt based on HMRC's interpretation of the law at the time of supply.
 
For example, a court rules that supplies previously regarded by HMRC as exempt were, and had always been, liable to VAT. HMRC would not usually require businesses affected by such rulings to register for VAT in relation to taxable supplies they made prior to the court decision. Businesses that choose to register for periods prior to the binding court decision on liability must satisfy the normal rules for VAT registration. They must also apply correct accounting procedures, including those for exempt supplies and associated input tax restrictions. They must also be able to submit supporting calculations and evidence any input tax deductions." (R&C Brief 24/11)

Exemption for persons making zero-rated supplies

"(1)     Notwithstanding the preceding provisions of this Schedule, where a person who makes or intends to make taxable supplies satisfies the Commissioners that any such supply is zero-rated or would be zero-rated if he were a taxable person, they may, if he so requests and they think fit, exempt him from registration under this Schedule until it appears to them that the request should no longer be acted upon or is withdrawn.

(2)     Where there is a material change in the nature of the supplies made by a person exempted under this paragraph from registration under this Schedule, he shall notify the Commissioners of the change—

(a)     within 30 days of the date on which it occurred; or

(b)     if no particular day is identifiable as the day on which it occurred, within 30 days of the end of the quarter in which it occurred.

(3)     Where there is a material alteration in any quarter in the proportion of taxable supplies of such a person that are zero-rated, he shall notify the Commissioners of the alteration within 30 days of the end of the quarter." (VATA 1994, Sch 1, para 14)

Timing of supplies: based on normal rules not cash basis

"Paragraph 1(a) applies at the end of the month when taxable supplies exceed the threshold.  For this purpose it is necessary to determine the time of supplies.  Section 6(1) provides for determining when a supply is treated as taking place “for the purposes of the charge to tax” which must include registration." (Bromley Emergency Training and Development Ltd v. HMRC [2012] UKFTT 30 (TC), §15, Judge Theodore Wallace)

Calculating value of supplies

Use value excluding VAT

"The value of a supply of goods or services shall be determined for the purposes of this Schedule on the basis that no VAT is chargeable on the supply." (VATA 1994, Sch 1, para 16)

Disregarded supplies

Certain supplies made whilst previously registered

"(4)     In determining the value of a person's supplies for the purposes of sub-paragraph (1)(a) or (2)(a) above, supplies made at a time when he was previously registered under this Act shall be disregarded if—

(a)     his registration was cancelled otherwise than under paragraph 13(3) below, paragraph 11 of Schedule 1A, paragraph 6(2) of Schedule 2, paragraph 6(3) of Schedule 3 or paragraph 6(2) of Schedule 3A, and

(b)     the Commissioners are satisfied that before his registration was cancelled he had given them all the information they needed in order to determine whether to cancel the registration." (VATA 1994, Sch 1, para 1(4))

Supplies of capital assets

"(7)     In determining the value of a person's supplies for the purposes of sub-paragraph (1) or (2) above, supplies of goods or services that are capital assets of the business in the course or furtherance of which they are supplied [...] shall be disregarded." (VATA 1994, Sch 1, para 1(7))

Exception for non-zero-rated supplies of land

"(8)     Where, apart from this sub-paragraph, an interest in, right over or licence to occupy any land would under sub-paragraph (7) above be disregarded for the purposes of sub-paragraph (1) or (2) above, it shall not be if it is supplied on a taxable supply which is not zero-rated." (VATA 1994, Sch 1, para 1(8))

Distance sales to non-taxable persons in the UK by person liable to be registered under Sch 2

"(7)     In determining the value of a person's supplies for the purposes of sub-paragraph (1) or (2) above, [...] any taxable supplies which would not be taxable supplies apart from section 7(4) shall be disregarded." (VATA 1994, Sch 1, para 1(7))

"(4)     Goods whose place of supply is not determined under any of the preceding provisions of this section shall be treated as supplied in the United Kingdom where—

(a)     the supply involves the removal of the goods to the United Kingdom by or under the directions of the person who supplies them;

(b)     the supply is a transaction in pursuance of which the goods are acquired in the United Kingdom from another member State by a person who is not a taxable person;

(c)     the supplier—

(i)     is liable to be registered under Schedule 2; or

(ii)     would be so liable if he were not already registered under this Act or liable to be registered under Schedule 1 [or 1A]3; and

(d)     the supply is neither a supply of goods consisting in a new means of transport nor anything which is treated as a supply for the purposes of this Act by virtue only of paragraph 5(1) or 6 of Schedule 4." (VATA 1994, s.7(4))

Fiscal warehouse supplies

"(9)     In determining the value of a person's supplies for the purposes of sub-paragraph (1) or (2) above, supplies to which section 18B(4) (last acquisition or supply of goods before removal from fiscal warehousing) applies and supplies treated as made by him under section 18C(3) (self-supply of services on removal of goods from warehousing) shall be disregarded." (VATA 1994, Sch 1, para 1(9))

Recipient of a transfer of a going concern: deemed to have made supplies of business transferred

"(1)     Where a business, or part of a business, carried on by a taxable person is transferred to another person as a going concern, then—

(a)     for the purpose of determining whether the transferee is liable to be registered under this Act he shall be treated as having carried on the business or part of the business before as well as after the transfer and supplies by the transferor shall be treated accordingly." (VATA 1994, s.49(1))

 

"(2)     Where a business, or part of a business, carried on by a taxable person is transferred to another person as a going concern, the transferee is UK-established at the time of the transfer and the transferee is not registered under this Act at that time, then, subject to sub-paragraphs (3) to (7) below, the transferee becomes liable to be registered under this Schedule at that time if—

(a)     the value of his taxable supplies in the period of one year ending at the time of the transfer has exceeded £85,000; or

(b)     there are reasonable grounds for believing that the value of his taxable supplies in the period of 30 days beginning at the time of the transfer will exceed £85,000" (VATA 1994, Sch 1, para 1(2))

Compulsory registration of UK business: supplies have or will exceed registration threshold

Exception from compulsory registration: supplies in next year will not exceed de-registration threshold

 

"(3)     A person does not become liable to be registered by virtue of sub-paragraph (1)(a) or (2)(a) above if the Commissioners are satisfied that the value of his taxable supplies in the period of one year beginning at the time at which, apart from this sub-paragraph, he would become liable to be registered will not exceed [the de-registration threshold]." (VATA 1994, Sch 1, para 1(3))

De-registration threshold

1 April 2017 to present: £83,000

Exception from compulsory registration: supplies in next year will not exceed deregistration threshold

Compulsory registration of non-UK established businesses making taxable supplies

 

"(1)     A person becomes liable to be registered under this Schedule at any time if conditions A to D are met.

(2)     Condition A is that—

(a)     the person makes taxable supplies, or

(b)     there are reasonable grounds for believing that the person will make taxable supplies in the period of 30 days then beginning.

(3)     Condition B is that those supplies (or any of them) are or will be made in the course or furtherance of a business carried on by the person.

(4)     Condition C is that the person has no business establishment, or other fixed establishment, in the United Kingdom in relation to any business carried on by the person.

(5)     Condition D is that the person is not registered under this Act." (VATA 1994, Sch 1A, para 1)

Transfer of a going concern: apply conditions at time of transfer

"(1)     A person does not become liable to be registered by virtue of paragraph 1(2)(b) if the reason for believing that taxable supplies will be made in the 30-day period mentioned there is that a business, or part of a business, carried on by a taxable person is to be transferred to the person as a going concern in that period.

(2)     But if the transfer takes place, the transferee becomes liable to be registered under this Schedule at the time of the transfer if conditions A to D in paragraph 1 are met in relation to the transferee at that time.

(3)     In determining for the purposes of sub-paragraph (2) whether condition B is met, the reference in paragraph 1(3) to a business is to be read as a reference to the business, or part of the business, that is transferred to the transferee." (VATA 1994, Sch 1A, para 2)

Disregard registrations that are cancelled because the person should never have been registered

"A person is treated as having become liable to be registered under this Schedule at any time when the person would have become so liable under paragraph 1 or 2 but for any registration that is subsequently cancelled under—

(a)     paragraph 11,

(b)     paragraph 13(3) of Schedule 1,

(c)     paragraph 6(2) of Schedule 2,

(d)     paragraph 6(3) of Schedule 3, or

(e)     paragraph 6(2) of Schedule 3A." (VATA 1994, Sch 1A, para 3)

Exemption for persons making only zero-rated supplies

"(1)     The Commissioners may exempt a person from registration under this Schedule if the person satisfies them that the taxable supplies that the person makes or intends to make—

(a)     are all zero-rated, or

(b)     would all be zero-rated if the person were a taxable person.

(2)     The power in sub-paragraph (1) is exercisable only if the person so requests and the Commissioners think fit.

(3)     If there is a material change in the nature of the supplies made by a person exempted under this paragraph, the person must notify the Commissioners of the change—

(a)     within 30 days beginning with the day on which the change occurred, or

(b)     if no particular day is identifiable as that day, within 30 days of the end of the quarter in which the change occurred.

(4)     If it appears to the Commissioners that a request under this paragraph should no longer be acted upon on or after any day or has been withdrawn on any day, they must register the person who made the request with effect from that day.

(5)     A reference in this paragraph to supplies is to supplies made in the course or furtherance of a business carried on by the person." (VATA 1994, Sch 1A, para 13)

Compulsory registration of non-UK established businesses making taxable supplies

Compulsory registration of overseas persons intending to claim VAT repayment 

 

"(1)     A person who is not registered under this Act, and is not liable to be registered under Schedule 1, 1A, 2 or 3, becomes liable to be registered under this Schedule at any time—

(a)     if he makes relevant supplies; or

(b)     if there are reasonable grounds for believing that he will make such supplies in the period of 30 days then beginning." (VATA 1994, Sch 3A, para 1(1))

Meaning of relevant supplies

"(1)     For the purposes of this Schedule a supply of goods is a relevant supply where—

(a)     the supply is a taxable supply;

(b)     the goods are assets of the business in the course or furtherance of which they are supplied; and

(c)     the person by whom they are supplied, or a predecessor of his, has received or claimed, or is intending to claim, a repayment of VAT on the supply to him, or the importation by him, of the goods or of anything comprised in them.

 

(2)     In relation to any goods, a person is the predecessor of another for the purposes of this paragraph if—

(a)     that other person is a person to whom he has transferred assets of his business by a transfer of that business, or part of it, as a going concern;

(b)     those assets consisted of or included those goods; and

(c)     the transfer of the assets is one falling by virtue of an order under section 5(3) (or under an enactment re-enacted in section 5(3)) to be treated as neither a supply of goods nor a supply of services;

and the reference in this paragraph to a person's predecessor includes references to the predecessors of his predecessor through any number of transfers.

 

(3)     The reference in this paragraph to a repayment of VAT is a reference to such a repayment under a scheme embodied in regulations made under section 39." (VATA 1994, Sch 3A, para 9)

Disregard registrations under other schedules if should not have been registered

"(2)     A person shall be treated as having become liable to be registered under this Schedule at any time when he would have become so liable under sub-paragraph (1) above but for any registration which is subsequently cancelled under paragraph 6(2) below, paragraph 13(3) of Schedule 1, paragraph 11 of Schedule 1A, paragraph 6(2) of Schedule 2 or paragraph 6(3) of Schedule 3." (VATA 1994, Sch 3A, para 1(2))

Exemption for persons making zero-rated supplies

"(1)     Notwithstanding the preceding provisions of this Schedule, where a person who makes or intends to make relevant supplies satisfies the Commissioners that any such supply is zero-rated or would be zero-rated if he were a taxable person, they may, if he so requests and they think fit, exempt him from registration under this Schedule.

(2)     Where there is a material change in the nature of the supplies made by a person exempted under this paragraph from registration under this Schedule, he shall notify the Commissioners of the change—

(a)     within 30 days of the date on which the change occurred; or

(b)     if no particular date is identifiable as the day on which it occurred, within 30 days of the end of the quarter in which it occurred.

(3)     Where there is a material alteration in any quarter in the proportion of relevant supplies of such a person that are zero-rated, he shall notify the Commissioners of the alteration within 30 days of the end of the quarter.

(4)     If it appears to the Commissioners that a request under sub-paragraph (1) above should no longer have been acted upon on or after any day, or has been withdrawn on any day, they shall register the person who made the request with effect from that day." (VATA 1994, Sch 3A, para 7)

Compulsory registration of overseas persons intending to claim VAT repayment 

Notification of liability to register and effective date of registration

Schedule 1

Liable due to last year's supplies: notice within 30 days of the end of the month, register from end of following month (unless earlier date agreed)

(1)     A person who becomes liable to be registered by virtue of paragraph 1(1)(a) above shall notify the Commissioners of the liability within 30 days of the end of the relevant month.

(2)     The Commissioners shall register any such person (whether or not he so notifies them) with effect from the end of the month following the relevant month or from such earlier date as may be agreed between them and him.

(3)     In this paragraph “the relevant month”, in relation to a person who becomes liable to be registered by virtue of paragraph 1(1)(a) above, means the month at the end of which he becomes liable to be so registered." (VATA 1994, Sch 1, para 5)

Liable due to next 30 days' supplies: notice before the end of 30 days, register from beginning of 30 days

"(1)     A person who becomes liable to be registered by virtue of paragraph 1(1)(b) above shall notify the Commissioners of the liability before the end of the period by reference to which the liability arises.

(2)     The Commissioners shall register any such person (whether or not he so notifies them) with effect from the beginning of the period by reference to which the liability arises." (VATA 1994, Sch 1, para 6)

Liable due to a TOGC: notice within 30 days of transfer, register from date of transfer

"(1)     A person who becomes liable to be registered by virtue of paragraph 1(2) above shall notify the Commissioners of the liability within 30 days of the time when the business is transferred.

(2)     The Commissioners shall register any such person (whether or not he so notifies them) with effect from the time when the business is transferred." (VATA 1994, Sch 1, para 7)

Multiple grounds apply: paras 6 and 7 take priority

Where a person becomes liable to be registered by virtue of paragraph 1(1)(a) above and by virtue of paragraph 1(1)(b) or 1(2) above at the same time, the Commissioners shall register him in accordance with paragraph 6(2) or 7(2) above, as the case may be, rather than paragraph 5(2) above." (VATA 1994, Sch 1, para 8)

Power to prescribe form of notice

"Any notification required under this Schedule shall be made in such form and manner and shall contain such particulars as may be specified in regulations or by the Commissioners in accordance with regulations." (VATA 1994, Sch 1, para 17)

Schedule 1A:

 

Liable due to making taxable supplies: notice within 30 days of liability arising, register from day liability arises

"(1)     A person who becomes liable to be registered by virtue of paragraph 1(2)(a) or 2(2) must notify the Commissioners of the liability before the end of the period of 30 days beginning with the day on which the liability arises.

(2)     The Commissioners must register any such person (whether or not the person so notifies them) with effect from the beginning of the day on which the liability arises." (VATA 1994, Sch 1A, para 5)

Liable due to taxable supply in next 30 days: notice before the end of 30 days, register from beginning of 30 days

"(1)     A person who becomes liable to be registered by virtue of paragraph 1(2)(b) must notify the Commissioners of the liability before the end of the period by reference to which the liability arises.

(2)     The Commissioners must register any such person (whether or not the person so notifies them) with effect from the beginning of the period by reference to which the liability arises." (VATA 1994, Sch 1A, para 6)

Schedule 3A

Liable due to making relevant supplies: notice within 30 days of liability arising, register from day liability arises

"(1)     A person who becomes liable to be registered by virtue of paragraph 1(1)(a) above shall notify the Commissioners of the liability before the end of the period of 30 days beginning with the day on which the liability arises.

(2)     The Commissioners shall register any such person (whether or not he so notifies them) with effect from the beginning of the day on which the liability arises." (VATA 1994, Sch 3A, para 3)

Liable due to relevant supply in next 30 days: notice before the end of 30 days, register from beginning of 30 days

"(1)     A person who becomes liable to be registered by virtue of paragraph 1(1)(b) above shall notify the Commissioners of the liability before the end of the period by reference to which the liability arises.

(2)     The Commissioners shall register any such person (whether or not he so notifies them) with effect from the beginning of the period by reference to which the liability arises." (VATA 1994, Sch 3A, para 3)

Notification of liability to register and effective date of registration

Form of notification

Use the prescribed form

"(1)     Where any person is required under paragraph 5(1), 6(1) or 7(1) of Schedule 1, paragraph 5(1), 6(1) or (13)(3) of Schedule 1A paragraph 3(1) of Schedule 2, paragraph 3(1) of Schedule 3 or paragraph 3(1) or 4(1) of Schedule 3A to the Act to notify the Commissioners of his liability to be registered, the notification shall contain the particulars (including the declaration) set out in the relevant form specified in a notice published by the Commissioners and shall be made in that form; provided that, where the notification is made by a partnership, the notification shall also contain the particulars set out in the relevant form specified in a notice published by the Commissioners." (SI 1995/2518, r.5(1))

Form of notification

Voluntary registration

 

"Where a person who is not liable to be registered under this Act and is not already so registered satisfies the Commissioners that he—

(a)     makes taxable supplies; or

(b)     is carrying on a business and intends to make such supplies in the course or furtherance of that business,

they shall, if he so requests, register him with effect from the day on which the request is made or from such earlier date as may be agreed between them and him." (VATA 1994, Sch 1, para 9)

Supplies abroad by UK established business that would be taxable supplies

"(1)     Where a person who is not liable to be registered under this Act and is not already so registered satisfies the Commissioners that he—

(a)     makes supplies within sub-paragraph (2) below; or

(b)     is carrying on a business and intends to make such supplies in the course or furtherance of that business,

and (in either case) is within sub-paragraph (3) below, they shall, if he so requests, register him with effect from the day on which the request is made or from such earlier date as may be agreed between them and him.

 

(2)     A supply is within this sub-paragraph if—

(a)     it is made outside the United Kingdom but would be a taxable supply if made in the United Kingdom; or

(b)     it is specified for the purposes of subsection (2) of section 26 in an order made under paragraph (c) of that subsection.

 

(3)     A person is within this sub-paragraph if—

(a)     he has a business establishment in the United Kingdom or his usual place of residence is in the United Kingdom; and

(b)     he does not make and does not intend to make taxable supplies.

 

(4)     For the purposes of this paragraph—

(a)     a person carrying on a business through a branch or agency in the United Kingdom shall be treated as having a business establishment in the United Kingdom, and

(b)     “usual place of residence”, in relation to a body corporate, means the place where it is legally constituted."  (VATA 1994, Sch 1, para 10)

Voluntary registration

Transfer of registration on transfer of a going concern

 

"(1)     Where—

(a)     a business or part of a business is transferred as a going concern,

(b)     the registration under Schedule 1 or 1A to the Act of the transferor has not already been cancelled,

(c)     on the transfer of the business or part of it the registration of the transferor under either Schedule is to be cancelled and either the transferee becomes liable to be registered under either Schedule or the Commissioners agree to register him under paragraph 9 of Schedule 1 to the Act, and

(d)     an application is made in the form specified in a notice published by the Commissioners by or on behalf of both the transferor and the transferee of that business or the part transferred,

the Commissioners may as from the date of the said transfer cancel the registration under Schedule 1 or 1A to the Act of the transferor and register the transferee under Schedule 1 or 1A to the Act as appropriate with the registration number previously allocated to the transferor." 

 

(2)     An application under paragraph (1) above shall constitute notification for the purposes of paragraph 11 of Schedule 1 or paragraph 7 of Schedule 1A to the Act." (SI 1995/2518, r.6(1) - (2))

 

Transfer of liabilities and rights

"(3)     Where the transferee of a business or part of a business has under paragraph (1) above been registered under Schedule l or 1A to the Act in substitution for the transferor of it, and with the transferor's registration number—

(a)     any liability of the transferor existing at the date of the transfer to make a return or to account for or pay VAT under regulation 25 or 40 shall become the liability of the transferee,

(b)     any right of the transferor, whether or not existing at the date of the transfer, to credit for, or to repayment of, input tax shall become the right of the transferee,

(c)     any right of either the transferor, whether or not existing at the date of the transfer, or the transferee to payment by the Commissioners under section 25(3) of the Act shall be satisfied by payment to either of them.

(d)     any right of the transferor, whether or not existing at the date of the transfer, to claim a refund under section 36 of the Act shall become the right of the transferee, 

(e)     any liability of the transferor, whether or not existing at the date of the transfer, to account for an amount under Part XIXA of these Regulations, shall become that of the transferee, and

(f)     any records relating to the business which, by virtue of these Regulations or a direction made by the Commissioners, are required to be preserved for any period after the transfer shall be preserved by the transferee unless the Commissioners, at the request of the transferor, otherwise direct." (SI 1995/2518, r.6(3))

 

Attribution of subsequent acts of transferor relating to the VAT registration to transferee

"(4)     In addition to the provisions set out in paragraph (3) above, where the transferee of a business or part of a business has been registered in substitution for, and with the registration number of, the transferor during a prescribed accounting period subsequent to that in which the transfer took place but with effect from the date of the transfer, and any—

(a)     return has been made,

(b)     VAT has been accounted for and paid, or

(c)     right to credit for input tax has been claimed,

either by or in the name of the transferee or the transferor, it shall be treated as having been done by the transferee." (SI 1995/2518, r.6(4))

Right to seek cancellation

 

Schedule 1 registration

"A person who has become liable to be registered under this Schedule shall cease to be so liable at any time if the Commissioners are satisfied in relation to that time that he—

(1) Ceased making taxable supplies

(a)     has ceased to make taxable supplies; or" (VATA 1994, Sch 1, para 3(a))

 

(2) Historic and immediate future supplies below registration threshold

(b)     is not at that time a person in relation to whom any of the conditions specified in paragraphs 1(1)(a) and (b) and (2)(a) and (b) above is satisfied; or" (VATA 1994, Sch 1, para 3(b))

(3) Ceasing to be UK-established

(c)     is not at that time UK-established (see paragraph 1(10))." (VATA 1994, Sch 1, para 3(c))

(4) Future supplies below de-registration threshold

"(1)     Subject to sub-paragraph (2) below, a person who has become liable to be registered under this Schedule shall cease to be so liable at any time after being registered if the Commissioners are satisfied that the value of his taxable supplies in the period of one year then beginning will not exceed [the de-registration threshold]." (VATA 1994, Sch 1, para 4(1))

 

De-registration threshold

1 April 2017 to present: £83,000

Exception for persons ceasing or suspending taxable supplies

"(2)     A person shall not cease to be liable to be registered under this Schedule by virtue of sub-paragraph (1) above if the Commissioners are satisfied that the reason the value of his taxable supplies will not exceed [the de-registration threshold] is that in the period in question he will cease making taxable supplies, or will suspend making them for a period of 30 days or more." (VATA 1994, Sch 1, para 4(2))

Disregarded supplies

"(3)     In determining the value of a person's supplies for the purposes of sub-paragraph (1) above, supplies of goods or services that are capital assets of the business in the course or furtherance of which they are supplied and any taxable supplies which would not be taxable supplies apart from section 7(4) shall be disregarded.

(4)     Where, apart from this sub-paragraph, an interest in, right over or licence to occupy any land would under sub-paragraph (3) above be disregarded for the purposes of sub-paragraph (1) above, it shall not be if it is supplied on a taxable supply which is not zero-rated." (VATA 1994, Sch 1, para 4(2) - (4))

See above Compulsory registration, disregarded supplies

Schedule 1A

"(1)     A person does not cease to be liable to be registered under this Schedule except in accordance with sub-paragraph (2).

(2)     A person who has become liable to be registered under this Schedule ceases to be so liable at any time if the Commissioners are satisfied that—

Ceases making taxable supplies

(a)     the person has ceased to make taxable supplies in the course or furtherance of a business carried on by the person, or

Has a UK establishment

(b)     the person is no longer a person in relation to whom condition C in paragraph 1 is met." (VATA 1994, Sch 1, para 4)

Schedule 3A

"A person who has become liable to be registered under this Schedule shall cease to be so liable at any time if the Commissioners are satisfied that he has ceased to make relevant supplies." (VATA 1994, Sch 3A, para 2)

Right to de-register

Persons ceasing to be entitled to be registered: duty to notify

 

"A person registered under paragraph 5, 6 or 9 above who ceases to make or have the intention of making taxable supplies shall notify the Commissioners of that fact within 30 days of the day on which he does so unless he would, when he so ceases, be otherwise liable or entitled to be registered under this Act if his registration and any enactment preventing a person from being liable to be registered under different provisions at the same time were disregarded." (VATA 1994, Sch 1, para 11)

"A person registered under paragraph 10 above who—

(a)     ceases to make or have the intention of making supplies within sub-paragraph (2) of that paragraph; or

(b)     makes or forms the intention of making taxable supplies,

shall notify the Commissioners of that fact within 30 days of the day on which he does so unless, in the case of a person ceasing as mentioned in sub-paragraph (a) above, he would, when he so ceases, be otherwise liable or entitled to be registered under this Act if his registration and any enactment preventing a person from being liable to be registered under different provisions at the same time were disregarded." (VATA 1994, Sch 1, para 12)

Persons ceasing to be entitled to be registered: duty to notify

Persons ceasing to be liable to be registered under Sch 1A or 3A: duty notify

 

"(1)     A person registered under paragraph 5 or 6 who, on any day, ceases to make or have the intention of making taxable supplies in the course or furtherance of a business carried on by that person must notify the Commissioners of that fact within 30 days beginning with that day.

(2)     But the person need not notify the Commissioners if on that day the person would otherwise be liable or entitled to be registered under this Act (disregarding for this purpose the person's registration under this Schedule and any enactment that prevents a person from being liable to be registered under different provisions at the same time)" (VATA 1994, Sch 1A, para 7)

"(1)     Subject to sub-paragraph (2) below, a person registered under paragraph 3 or 4 above who ceases to make or have the intention of making relevant supplies shall notify the Commissioners of that fact within 30 days of the day on which he does so.

(2)     Sub-paragraph (1) above does not apply if the person would, when he so ceases, be otherwise liable or entitled to be registered under this Act if his registration and any enactment preventing a person from being liable to be registered under different provisions at the same time were disregarded." (VATA 1994, Sch 3A, para 5)

Persons ceasing to be liable to be registered under Sch 1A or 3A: duty notify

Form of notification

 

"(3)     Every notification by a registered person under paragraph 11 or 12 of Schedule 1, paragraph 5 of Schedule 2, paragraph 5 of Schedule 3 or paragraph 5 of Schedule 3A to the Act shall state—

(a)     the date on which he ceased to make, or have the intention of making, taxable supplies; or

(b)     where paragraph 12(a) of Schedule 1 to the Act applies, the date on which he ceased to make, or have the intention of making, supplies within paragraph 10(2) of that Schedule; or

(c)     where paragraph 12(b) of Schedule 1 to the Act applies, the date on which he made, or formed the intention of making, taxable supplies; or

(d)     where paragraph 5(1) of Schedule 2 to the Act applies, the date on which he ceased to be registrable by virtue of paragraph 5(4) of that Schedule; or

(e)     where paragraph 5(1) of Schedule 3 to the Act applies, the date on which he ceased to be registrable by virtue of paragraph 5(3) of that Schedule; or

(f)     where paragraph 5(1) of Schedule 3A to the Act applies, the date on which he ceased to make, or have the intention of making, relevant supplies within the meaning of paragraph 9 of that Schedule." (SI 1995/2518, r.5(3))

Form of notification

Cancellation of registration 

 

Ceasing to be required to be registered

Schedule 1

"(1)     Subject to sub-paragraph (4) below, where a registered person satisfies the Commissioners that he is not liable to be registered under this Schedule, they shall, if he so requests, cancel his registration with effect from the day on which the request is made or from such later date as may be agreed between them and him.

(4)     The Commissioners shall not under sub-paragraph (1) above cancel a person's registration with effect from any time unless they are satisfied that it is not a time when that person would be subject to a requirement to be registered under this Act." (VATA 1994, Sch 1, para 13(1), (4))

 

Registered person

"(7)     In this paragraph, any reference to a registered person is a reference to a person who is registered under this Schedule." (VATA 1994, Sch 1, para 13(7))

Requirement to be registered

"(6)     In determining for the purposes of sub-paragraph (4) or (5) above whether a person would be subject to a requirement, or entitled, to be registered at any time, so much of any provision of this Act as prevents a person from becoming liable or entitled to be registered when he is already registered or when he is so liable under any other provision shall be disregarded." (VATA 1994, Sch 1, para 13(6))

Schedule 1A: HMRC must cancel if asked

"(1)     The Commissioners must cancel a person's registration under this Schedule if—

(a)     the person satisfies them that the person is not liable to be registered under this Schedule, and

(b)     the person requests the cancellation.

 

(2)     The cancellation is to be made with effect from—

(a)     the day on which the request is made, or

(b)     such later day as may be agreed between the Commissioners and the person." 

 

"(3)     But the Commissioners must not cancel the registration with effect from any time unless they are satisfied that it is not a time when the person would be subject to a requirement to be registered under this Act." (VATA 1994, Sch 1A, para 8(1) - (2))

 

Requirement to be registered

"In determining for the purposes of paragraphs 8 and 9 whether a time is a time when a person would be subject to a requirement, or entitled, to be registered under this Act, so much of any provision of this Act as prevents a person from becoming liable or entitled to be registered when the person is already registered or when the person is so liable under any other provision must be disregarded."(VATA 1994, Sch 1A, para 10)

Schedule 1A: HMRC may cancel even if not asked

(1)     The Commissioners may cancel a person's registration under this Schedule if they are satisfied that the person has ceased to be liable to be registered under this Schedule.

(2)     The cancellation is to be made with effect from—

(a)     the day on which the person ceased to be so liable, or

(b)     such later day as may be agreed between the Commissioners and the person.

(3)     But the Commissioners must not cancel the registration with effect from any time unless they are satisfied that it is not a time when the person would be subject to a requirement, or entitled, to be registered under this Act." (VATA 1994, Sch 1A, para 9)

Schedule 3A

"(1)     Subject to sub-paragraph (3) below, where the Commissioners are satisfied that a registered person has ceased to be liable to be registered under this Schedule, they may cancel his registration with effect from the day on which he so ceased or from such later date as may be agreed between them and him.

[...]

(3)     The Commissioners shall not under sub-paragraph (1) above cancel a person's registration with effect from any time unless they are satisfied that it is not a time when that person would be subject to a requirement, or entitled, to be registered under this Act.

(4)     In determining for the purposes of sub-paragraph (3) above whether a person would be subject to a requirement, or entitled, to be registered at any time, so much of any provision of this Act as prevents a person from becoming liable or entitled to be registered when he is already registered or when he is so liable under any other provision shall be disregarded."  (VATA 1994, Sch 3A, para 6)

Ceasing to be entitled to be registered

"(2)     Subject to sub-paragraph (5) below, where the Commissioners are satisfied that a registered person has ceased to be registrable, they may cancel his registration with effect from the day on which he so ceased or from such later date as may be agreed between them and him.

(5)     The Commissioners shall not under sub-paragraph (2) above cancel a person's registration with effect from any time unless they are satisfied that it is not a time when that person would be subject to a requirement, or entitled, to be registered under this Act." (VATA 1994, Sch 1, para 13(2), (5))

 

Registrable 

"In this Schedule “registrable” means liable or entitled to be registered under this Schedule." (VATA 1994, Sch 1, para 18)

Never entitled to be registered

"(3)     Where the Commissioners are satisfied that on the day on which a registered person was registered he was not registrable, they may cancel his registration with effect from that day." (VATA 1994, Sch 1, para 13(3))

"(1)     The Commissioners may cancel a person's registration under this Schedule if they are satisfied that the person was not liable to be registered under this Schedule on the day on which the person was registered.

(2)     The cancellation is to be made with effect from the day on which the person was registered." (VATA 1994, Sch 1A, para 11)

"(2)     Where the Commissioners are satisfied that on the day on which a registered person was registered he was not registrable, they may cancel his registration with effect from that day."  (VATA 1994, Sch 3A, para 6(2))

Schedule 3B

"(8)     This paragraph is subject to paragraph 18 of Schedule 3B (cancellation of registration under this Schedule of persons seeking to be registered under that Schedule, etc)." (VATA 1994, Sch 1, para 13(8))

Deemed supply of goods on de-registration

See VATA 1994, Schedule 4, para 8.

Cancellation of registration 

Artificial separation of business activities to avoid registration

 

"(1)     Paragraph 2 below is for the purpose of preventing the maintenance or creation of any artificial separation of business activities carried on by two or more persons from resulting in an avoidance of VAT." (VATA 1994, Sch 1, para 1A(1))

"(1)     Without prejudice to paragraph 1 above, if the Commissioners make a direction under this paragraph, the persons named in the direction shall be treated as a single taxable person carrying on the activities of a business described in the direction and that taxable person shall be liable to be registered under this Schedule with effect from the date of the direction or, if the direction so provides, from such later date as may be specified therein.

(2)     The Commissioners shall not make a direction under this paragraph naming any person unless they are satisfied—

(a)     that he is making or has made taxable supplies; and

(b)     that the activities in the course of which he makes or made those taxable supplies form only part of certain activities, the other activities being carried on concurrently or previously (or both) by one or more other persons; and

(c)     that, if all the taxable supplies the business described in the direction were taken into account, a person carrying on that business would at the time of the direction be liable to be registered by virtue of paragraph 1 above;" (VATA 1994, Sch 1, para 2(1) - (2))

Meaning of artificial separation

"(2)     In determining for the purposes of sub-paragraph (1) above whether any separation of business activities is artificial, regard shall be had to the extent to which the different persons carrying on those activities are closely bound to one another by financial, economic and organisational links." (VATA 1994, Sch 1, para 1A(2))

HMRC guidance on artificiality:

Statement of practice 4/1983, §4 - 5

Meaning of financial, economic and organisational links

"Again each case will depend on its specific circumstances. The following examples illustrate the types of factors indicative of the necessary links, although there will be many others:
Financial links
financial support given by one part to another part
one part would not be financially viable without support from another part
common financial interest in the proceeds of the business
Economic links
seeking to realise the same economic objective
the activities of one part benefit the other part
supplying the same circle of customers
Organisational links
common management
common employees
common premises
common equipment" (Statement of practice 4/1983, §6)

Serve notice on all persons named

"(3)     A direction made under this paragraph shall be served on each of the persons named in it." (VATA 1994, Sch 1, para 2(3))

Effect of direction: persons treated as single taxable carrying on partnership

"(6)     In relation to a business specified in a direction under this paragraph, the persons named in the direction, together with any person named in a supplementary direction relating to that business (being the persons who together are to be treated as the taxable person), are in sub-paragraphs (7) and (8) below referred to as “the constituent members”.

 

(7)     Where a direction is made under this paragraph then, for the purposes of this Act—

(a)     the taxable person carrying on the business specified in the direction shall be registrable in such name as the persons named in the direction may jointly nominate by notice in writing given to the Commissioners not later than 14 days after the date of the direction or, in default of such a nomination, in such name as may be specified in the direction;

(b)     any supply of goods or services by or to one of the constituent members in the course of the activities of the taxable person shall be treated as a supply by or to that person;

(c)     any acquisition of goods from another member State by one of the constituent members in the course of the activities of the taxable person shall be treated as an acquisition by that person;

(d)     each of the constituent members shall be jointly and severally liable for any VAT due from the taxable person;

(e)     without prejudice to paragraph (d) above, any failure by the taxable person to comply with any requirement imposed by or under this Act shall be treated as a failure by each of the constituent members severally; and

(f)     subject to paragraphs (a) to (e) above, the constituent members shall be treated as a partnership carrying on the business of the taxable person and any question as to the scope of the activities of that business at any time shall be determined accordingly." (VATA 1994, Sch 1, para 2(6) - (7))

Cancellation of separate registrations

"(5)     If, immediately before a direction (including a supplementary direction) is made under this paragraph, any person named in the direction is registered in respect of the taxable supplies made by him as mentioned in sub-paragraph (2) or (4) above, he shall cease to be liable to be so registered with effect from whichever is the later of—

(a)     the date with effect from which the single taxable person concerned became liable to be registered; and

(b)     the date of the direction." (VATA 1994, Sch 1, para 2(5))

Adding persons to the direction

"(4)     Where, after a direction has been given under this paragraph specifying a description of business, it appears to the Commissioners that a person who was not named in that direction is making taxable supplies in the course of activities which should be regarded as part of the activities of that business, the Commissioners may make and serve on him a supplementary direction referring to the earlier direction and the description of business specified in it and adding that person's name to those of the persons named in the earlier direction with effect from—

(a)     the date on which he began to make those taxable supplies, or

(b)     if it was later, the date with effect from which the single taxable person referred to in the earlier direction became liable to be registered under this Schedule." (VATA 1994, Sch 1, para 2(4))

Removing persons from full effect of direction

"(8)     If it appears to the Commissioners that any person who is one of the constituent members should no longer be regarded as such for the purposes of paragraphs (d) and (e) of sub-paragraph (7) above and they give notice to that effect, he shall not have any liability by virtue of those paragraphs for anything done after the date specified in that notice and, accordingly, on that date he shall be treated as having ceased to be a member of the partnership referred to in paragraph (f) of that sub-paragraph." (VATA 1994, Sch 1, para 2(8))

Artificial separation of business activities to avoid registration

Partnership registration

 

"(1)     The registration under this Act of persons—

(a)     carrying on a business in partnership, or

(b)     carrying on in partnership any other activities in the course or furtherance of which they acquire goods from other member States,

may be in the name of the firm; and no account shall be taken, in determining for any purpose of this Act whether goods or services are supplied to or by such persons or are acquired by such persons from another member State, of any change in the partnership." (VATA 1994, s.45(1))

Former partners remain liable until change notified to HMRC

"(2)     Without prejudice to section 36 of the Partnership Act 1890 (rights of persons dealing with firm against apparent members of firm), until the date on which a change in the partnership is notified to the Commissioners a person who has ceased to be a member of a partnership shall be regarded as continuing to be a partner for the purposes of this Act and, in particular, for the purpose of any liability for VAT on the supply of goods or services by the partnership or on the acquisition of goods by the partnership from another member State." (VATA 1994, s.45(2))

Apportionment of liabilities for persons not a partner throughout prescribed accounting period

"(5)     Subsections (1) and (3) above shall not affect the extent to which, under section 9 of the Partnership Act 1890, a partner is liable for VAT owed by the firm; but where a person is a partner in a firm during part only of a prescribed accounting period, his liability for VAT on the supply by the firm of goods or services during that accounting period or on the acquisition during that period by the firm of any goods from another member State shall be such proportion of the firm's liability as may be just." (VATA 1994, s.45(5))

Partnership registration

Divisional registration 

 

"(1)     The registration under this Act of a body corporate carrying on a business in several divisions may, if the body corporate so requests and the Commissioners see fit, be in the names of those divisions." (VATA 1994, s.46(1))

Unincorporated bodies registration 

 

"(3)     The registration under this Act of any such club, association or organisation may be in the name of the club, association or organisation; and in determining whether goods or services are supplied to or by such a club, association or organisation or whether goods are acquired by such a club, association or organisation from another member State, no account shall be taken of any change in its members." (VATA 1994, s.46(3))

Divisional registration 
Unincorporated bodies registration 

Notification of changes relating to registration

 

"(2)     Every registered person except one to whom paragraph 11, 12, 13(1), (2) or (3) of Schedule 1, paragraph 7, 8 or 9(1) of Schedule 1A, paragraph 5 of Schedule 2, paragraph 5 of Schedule 3 or paragraph 5 of Schedule 3A of the Act applies, shall, within 30 days of any changes being made in the name, constitution or ownership of his business, or of any other event occurring which may necessitate the variation of the register or cancellation of his registration, notify the Commissioners of such change or event and furnish them with full particulars thereof." (SI 1995/2518, r.5(2))

Notification of changes relating to registration

VAT representative for non-established persons

Compulsory appointment

"(1)     Subsection (1ZA) applies where any person—

(a)     is a taxable person for the purposes of this Act or, without being a taxable person, is a person who makes taxable supplies or who acquires goods in the United Kingdom from one or more other member States;

(b)     is not established, and does not have any fixed establishment, in the United Kingdom;

(ba)     is established in a country or territory in respect of which it appears to the Commissioners that the condition specified in subsection (1A) below is satisfied; and

(c)     in the case of an individual, does not have his usual place of residence or permanent address in the United Kingdom.

 

(1ZA)     The Commissioners may direct the person to secure that there is a UK-established person who is—

(a)     appointed to act on the person's behalf in relation to VAT, and

(b)     registered against the name of the person in accordance with any regulations under subsection (4).

 

(1A)     The condition mentioned in subsection (1)(ba) above is that—

(a)     the country or territory is neither a member State nor a part of a member State, and

(b)     there is no provision for mutual assistance between the United Kingdom and the country or territory similar in scope to the assistance provided for between the United Kingdom and each other member State by the mutual assistance provisions." (VATA 1994, s.48(1) - (1A))

"(7B)     A direction under subsection (1ZA)—

(a)     may specify a time by which it (or any part of it) must be complied with;

(b)     may be varied;

(c)     continues to have effect (subject to any variation) until it is withdrawn or the conditions specified in subsection (1) are no longer satisfied." (VATA 1994, s.48(7B))

Mutual assistance provisions

"(1B)     In subsection (1A) above “the mutual assistance provisions” means—

(a)     section 87 of the Finance Act 2011 (mutual assistance for recovery of taxes etc) and Schedule 25 to that Act;

(b)     section 173 of the Finance Act 2006 (international tax enforcement arrangements);

(c)     Council Regulation (EC) No 904/2010 of 7 October 2010 on administrative cooperation and combating fraud in the field of value added tax." (VATA 1994, s.48(1B))

UK-established

"(8A)     For the purposes of subsections (1ZA) and (2)—

(a)     a person is UK-established if the person is established, or has a fixed establishment, in the United Kingdom, and

(b)     an individual is also UK-established if the person's usual place of residence or permanent address is in the United Kingdom." (VATA 1994, s.48(8A))

HMRC must serve notice

"(8)     For the purposes of this Act a person shall not be treated as having been directed to appoint a VAT representative, or as having been required to provide security under subsection (7) above, unless the Commissioners have either—

(a)     served notice of the direction or requirement on him; or

(b)     taken all such other steps as appear to them to be reasonable for bringing the direction or requirement to his attention."  (VATA 1994, s.48(8))

Voluntary appointment of VAT representative

"(2)     With the agreement of the Commissioners, a person—

(a)     who has not been given a direction under subsection (1ZA), and

(b)     in relation to whom the conditions specified in paragraphs (a), (b) and (c) of subsection (1) are satisfied,

may appoint a UK-established person to act on his behalf in relation to VAT." (VATA 1994, s.48(2))

Notification and recording of appointment

"(1)     Where any person is appointed by virtue of section 48 of the Act to be the VAT representative of another (in this regulation referred to as “his principal”), the VAT representative shall notify the Commissioners of his appointment in the form specified in a notice published by the Commissioners within 30 days of the date on which his appointment became effective and the notification shall contain the particulars (including the declaration) set out in that notice.

(2)     The notification referred to in this regulation shall be accompanied by evidence of the VAT representative's appointment.

(3)     Subject to paragraphs (3A) and (3B), where a person is appointed by virtue of section 48 of the Act to be a VAT representative, the Commissioners shall register the name of that VAT representative against the name of his principal in the register kept for the purposes of the Act." (SI 1995/2518, r.10(1) - (3))

VAT representative not required to be separately VAT registered

"(4)     A VAT representative shall not be liable by virtue of subsection (3) above himself to be registered under this Act [...]" (VATA 1994, s.48(4))

Notification of changes

"(4)     Every VAT representative who is registered in accordance with this regulation shall, within 30 days of any changes being made in the name, constitution or ownership of his business or of his ceasing to be a person's VAT representative, or of any other event occurring which may necessitate the variation of the register, notify the Commissioners in writing of such change, cessation or event and furnish them with full particulars thereof." (SI 1995/2518, r.10(4))

Refusal of appointment of person who is not fit and proper

"(3A)     The Commissioners may refuse to register a person in accordance with paragraph (3) if they are satisfied that the person is not a fit and proper person to act in that capacity.

(3B)     Where a person is registered as a VAT representative in accordance with paragraph (3) the Commissioners may cancel that person's registration if they are satisfied that the person is not, or is no longer, a fit and proper person to act in that capacity." (SI 1995/2518, r.10(3A) - (3B))

Rights and obligations of VAT representative

"(3)     Where any person is appointed by virtue of this section to be the VAT representative of another (“his principal”), then, subject to subsections (4) to (6) below, the VAT representative—

(a)     shall be entitled to act on his principal's behalf for any of the purposes of this Act, of any other enactment (whenever passed) relating to VAT or of any subordinate legislation made under this Act or any such enactment;

(b)     shall, subject to such provisions as may be made by the Commissioners by regulations, secure (where appropriate by acting on his principal's behalf) his principal's compliance with and discharge of the obligations and liabilities to which his principal is subject by virtue of this Act, any such other enactment or any such subordinate legislation; and

(c)     shall be personally liable in respect of—

(i)     any failure to secure his principal's compliance with or discharge of any such obligation or liability; and

(ii)     anything done for purposes connected with acting on his principal's behalf,

as if the obligations and liabilities imposed on his principal were imposed jointly and severally on the VAT representative and his principal." (VATA 1994, s.48(3))

Cessation of appointment

"(5)     For the purposes of this regulation the date upon which the appointment of a VAT representative (“the first VAT representative”) shall be regarded as having ceased shall be treated as being whichever is the earliest of the following times—

(a)     when the Commissioners receive any notification in accordance with regulation 5(2), or

(b)     when the Commissioners receive a notification of appointment in accordance with paragraph (1) above of a person other than the first VAT representative, or

(c)     when the Commissioners receive a notification of cessation in accordance with regulation 5(2), or

(d)     when the Commissioners receive a notification of cessation in accordance with paragraph (4) above, or

(e)     when a VAT representative dies, becomes insolvent or becomes incapacitated, or

(f)     when the Commissioners cancel a VAT representative's registration in accordance with paragraph (3B),

provided that if the Commissioners have not received a notification such as is mentioned in all or any of sub-paragraphs (a), (c) or (d) above and another person has been appointed as a VAT representative by virtue of section 48 of the Act, the Commissioners may treat the date of cessation as the date of appointment of that other person.

(6)     In relation to a company which is a VAT representative, the references in paragraph (5)(e) above to the VAT representative becoming insolvent or incapacitated shall be construed as references to its going into liquidation or receivership or entering administration." (SI 1995/2518, r.10(4))

VAT representative for non-established persons
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