A: Unfortunately, it is only possible to get “exception” from VAT registration if you have gone over the threshold under the backward-look test.
Here your client is registerable under the forward-look test; this states that if, at any time, you become aware that in the next 30 days alone your taxable turnover will be greater than the VAT registration limit, then you must register for VAT from the date that expectation arose.
So, if the auction was on the 1st December 2022, then the date of VAT registration would also be the 1st December 2022 and so there would, if the goods were sold within the UK, be a standard-rated supply of the chronometer, i.e. 1/6 of £120k would be £20k VAT payable to HMRC. In addition, any day-to-day sales from 1/12/22 until deregistration would also attract VAT.
They could request a deregistration from VAT on 2nd December on a voluntary basis based on the expectation that in the next 12 months their taxable turnover would only be £72k which would be below the deregistration threshold of £83k.
These publications from Markel Tax were correct at the time of going to press and should be considered as principles-based guidance only. To check current validity, call the Markel Tax helpline. ICAEW (as distributor) disclaims all liability for any errors or omissions.
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Markel Tax offers expert advice on UK tax and VAT via its helpline and provides monthly FAQs with questions and answers on common tax issues for businesses and practitioners.
