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Readers’ forum: VAT registration dilemma for builder

24 June 2024
Issue: 4942 / Categories: Forum & Feedback , VAT
Follow up VAT query

I was interested in the recent replies to reader query 20 309 and whether a business that was not registered for VAT would have to register with the forward-looking test if there was a one-off contract for £100 000. The replies seemed to offer different thoughts according to whether it was a single or continuous contract. My situation is similar but for a builder client:

  • he has not traded for 12 months because of a back injury;
  • he has never registered for VAT because previous work has been labour only ie less than the registration threshold;
  • he has agreed a contract for £100 000 with a private client to build an extension to his house which is made up of materials (£80 000) and labour (£20 000);
  • the agreement with the client is that he will invoice and be paid for the materials in four stages: the...

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