Threshold thoughts

My client voluntarily de-registered for VAT with effect from 2 March 2012 believing that his turnover would be below £71 000 in the next 12 months due to the economic slowdown.

Lately his business has picked up (ironically because he is 20% cheaper than most of his competitors).

I am concerned that his de-registration letter from HMRC states that “if you ask for your registration to be cancelled and it is later found that it should not have been you will have to pay any VAT outstanding as a result.”

Does our client have a problem if he exceeds the £71 000 even if he does not exceed the current registration threshold of £77 000?

In addition will HMRC automatically backdate the registration to 2 March 2012 if he exceeds £77 000 and has to re-register?

I would be very grateful for thoughts and advice on this...