VAT Registration: Are You Counting Everything That Matters?

The VAT registration threshold can be easy to lose sight of, particularly for organisations whose main activities are exempt from VAT or outside its scope. Once an organisation carries on any taxable business activity, however, monitoring only the income recorded as sales in its accounts may not be enough. Certain services bought from overseas suppliers can also count towards the threshold under the reverse charge, potentially creating a registration requirement even where the organisation’s own taxable sales remain below £90,000.

This issue can be particularly relevant in the charities and non-profit sector, where taxable, exempt and non-business activities often sit alongside one another. But it is not confined to that sector. A recent First-tier Tribunal decision illustrates more broadly that registration obligations follow the statutory rules and the underlying business activity, not the taxpayer’s understanding of where the obligation sits.