A.When looking at registration there are two tests. The forward look requires that if you have reasonable grounds to believe that in the next 30 days alone your turnover will exceed £83,000 you are liable to be VAT registered from the date on which you had that expectation and must notify HMRC within 30 days. For example, if you know on 5th October 2016 that you will generate more than £83,000 in the next 30 days then you will be VAT registered from 5th October 2016 and have until 4th November 2016 to notify HMRC.
The backward look states that if at the end of any month your turnover for the past 12 months or less exceeds £83,000 then you have 30 days from the end of that month to notify HMRC and then you are liable to be registered from the 1st day of the second month following the month in which you exceed the threshold. For example, if your turnover exceeds £83,000 on 5th October 2016 then you have until 30 November 2016 to notify HMRC of your registration but you do not need to start accounting for VAT until 1st December 2016.
In your client’s situation there is no 30 day period during which they will receive more than £83,000, so your client will not need to register from today. They can wait until they exceed the £83,000 threshold by using the backward look.
