Entering the scheme: rejected applications
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 52(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.