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Reasonably excused?

15 March 2011
Issue: 4296 / Categories: Forum & Feedback , VAT
A client’s turnover exceeds the VAT registration limit, but the business has not registered as it is the receipts for work done for an overseas charity that take it above the limit

 I have recently taken on a new client who has never been registered for VAT even though his total income from consultancy work is £80 000 a year i.e. above the current £70 000 registration limit.

The reason he is not VAT registered is because his previous accountant said that he could exclude from this figure any work he does for overseas clients namely consultancy services for a Dutch charity (£20 000 pa).

My understanding is that you only exclude ‘B2B’ (business to business) sales from the calculations because the customer then deals with the VAT in his own country.
But I understand that this particular charity is not registered for VAT in Holland. So does my client therefore have a VAT problem in the UK because it is not a B2B sale?
It is important to get this right because my client has traded...

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