The main reason that businesses are rejected is because the
system bases its eligibility check on the business’ previous
recorded annual turnover. If the turnover is above £1,350,000
then a business will be rejected.
Forward look - However, under regulation 50(1)(b)
VATAAS2100, the test should strictly
be based on a
forward look. If a business demonstrates that its
future turnover will be £1,350,000 or less, then you may allow
it to use the scheme from the date requested on the original
application. (See
VATAAS6000 for more details).
No previous trading history - Where a business has
been registered for less than 12 months, the computer will check
the estimated turnover on the R1 screen. If this is more than
£1,350,000, then the application will be rejected and the
business notified. However, if the business can demonstrate that
the estimated figure is wrong and you accept revised figures, you
may allow it to use the scheme from the date requested on the
original application.
