HMRC has updated VAT Notice 700/46 to reflect changes to the underlying legislation which require businesses to leave the scheme and empower HMRC to remove them from the scheme.
Sections 7.2 ‘When to leave the scheme’ and 7.3 ‘When can HMRC compulsorily remove you from the scheme’ now note that where, at the end of any month, the business has turnover from farming activities of more than £230,000 for the prior 30-day period, the business must leave the scheme and HMRC has the power to cancel its flat-rate certificate.
This new condition replaces the ‘protection of revenue’ condition, where a farming business would be required to leave the scheme (or HMRC could compulsorily remove it) if it was recovering substantially more as a flat-rate farming business than it would if it were registered for VAT in the normal way.
These revisions reflect the changes to the VAT Regulations, SI 1995/2518, reg 206 (and the addition of new reg 206A) which were introduced by the VAT (Amendment) Regulations, SI 2020/1384, with effect from 1 January 2021.
HMRC has updated VAT Notice 700/46 to reflect changes to the underlying legislation which require businesses to leave the scheme and empower HMRC to remove them from the scheme.
Sections 7.2 ‘When to leave the scheme’ and 7.3 ‘When can HMRC compulsorily remove you from the scheme’ now note that where, at the end of any month, the business has turnover from farming activities of more than £230,000 for the prior 30-day period, the business must leave the scheme and HMRC has the power to cancel its flat-rate certificate.
This new condition replaces the ‘protection of revenue’ condition, where a farming business would be required to leave the scheme (or HMRC could compulsorily remove it) if it was recovering substantially more as a flat-rate farming business than it would if it were registered for VAT in the normal way.
These revisions reflect the changes to the VAT Regulations, SI 1995/2518, reg 206 (and the addition of new reg 206A) which were introduced by the VAT (Amendment) Regulations, SI 2020/1384, with effect from 1 January 2021.
