Regretful dismissal

Exception from VAT registration

The taxpayer had run a garden maintenance business for many years. In November 2012 the business exceeded the annual VAT registration threshold but the taxpayer’s accountant requested an exception to registration on the basis that it had carried out landscaping work of £3 500 in November 2012 which would not be repeated in the future.

HMRC asked for more information which was not forthcoming so registered the business from 1 January 2013. A partner in the taxpayer explained to HMRC in December 2013 that he would not exceed the threshold again due to his own ill health and his wife’s retirement from the business.

However after a detailed check of the business’s accounts HMRC found that the threshold was exceeded in the 12-month period ending 30 September 2012 and the deregistration threshold was not achieved until January 2014. As a...