Spring 2005 Newsletter Content Home Sweet Pension Anything To Declare? Death And Taxes His And Hers Oh, Gross! We Didn't Mean It Agassi Wins Time To Go It Could Be Worse... Trivial Pursuit Re: Mortgages A Marriage Made In... Time's Money Show Business Scam Of The Decade? Gift Aid Vat's Hot! Wait For It A Good Buy? Know Your Articles Rights And Wrongs

Time's Money Everyone knows that time is money, and as time runs away, so can money. That was the experience of a businesswoman in a recent VAT appeal. She started a business that she thought would be too small to have to worry about VAT - at the moment, you need turnover of £58,000 a year to be registered. But she did better than she expected, and so she wrote to Customs in October 2003 to ask about registration. She thought that her turnover was likely to fall again, so she suggested that they could excuse her from registering. For this exemption, you have to positively show Customs that your sales are likely to be below £56,000 in the next year, and she couldn't do that - she just didn't think they would be that high. Pessimism isn't enough. But it took some time for the correspondence to go backwards and forwards before the decision was taken that she should be registered - from 1 October 2003. The problem was that it was now the end of January 2004, and she had already billed clients for the December quarter without adding VAT. There was nothing the appeal Tribunal could do - she would have to take the VAT out of what the customers had paid. She should have realised earlier that she was likely to have to register, and then she could have raised pro-forma VAT invoices for her customers. Missing your VAT registration date is an expensive business, and you are supposed to keep track of your turnover at the end of each month. If you have started a new business, it's one of the key things to focus on, along with everything else you have to do to actually try to make money. If you want help, we can provide it. This article is about the VAT Tribunal case of Jabat Ltd (18,752). Customs had no discretion either to excuse the trader from registration (as she had no evidence to satisfy them that her turnover would fall below the deregistration threshold in the next year), or to move the registration date to a later date - once she satisfied the rules, she had to be registered from 1 October 2003.