Too vague an estimate

Rules for exception from VAT registration

The taxpayer was a consultant gynaecologist employed by the NHS. He made exempt supplies through his private medical practice but he also had taxable income from producing legal reports in his capacity as an expert witness. The medical legal work income exceeded the registration threshold for the first time in October 2013.

The taxpayer wrote to HMRC requesting an exception to being registered because his expected income for the 12 months beginning 1 December 2013 would be less than the deregistration threshold of £77 000. He explained this was because he was due to retire in August 2014.

HMRC refused the exception application on the basis that the predicted turnover was below the threshold only because the taxpayer did not intend to trade for the entire 12 months. This approach is supported by VATA 1994 Sch 1 para 4(2) which states that a...