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HMRC internal manual

VAT Registration

Exception from registration: subsequent liability to exception

Exception is generally granted on the basis of the value of taxable supplies made and future supplies anticipated at the time the application is made. However, the pattern and value of the anticipated supplies may change. Once a person is granted exception, he does not become immune to a liability to register with regard to the supplies he continues to make. Nor does the granting of exception create a ‘cut-off date’ from which the calculation of any subsequent liability to registration recommences.

Persons granted exception must continue to monitor their taxable supplies on a monthly basis in order to determine the date when a further liability to registration arises.


A trader is granted exception but, a month later, the value of his supplies renders him liable to registration under Schedule 1, paragraph 1(1)(a). He needs to satisfy us that, despite such liability, his expected turnover for the forthcoming 12 months will not exceed the deregistration threshold.

As a concession, we will not require a trader to re-apply for exception where any further liability is based purely on the circumstances giving rise to the original request for exception.

The conditions for applying this concession are that:

  • the turnover in any subsequent month is less than one twelfth of the deregistration threshold at that time, and
  • the trader has no reason to believe they will exceed the deregistration threshold in the then following 12 months.

These conditions are set out in the letter at VATREG47150 and may be omitted at your discretion for protection of the revenue purposes.

Where exception is granted to a person who, you later find out, made a false statement, you may consider registering the person from the date from which they would otherwise have been registerable.