If a business only sells VAT exempt goods, can it still register for VAT?

If a business only sells VAT exempt goods, can it still register for VAT?

• A. Yes, at any time
• B. No, it is not allowed
• C. Yes, if it meets a certain revenue threshold
• D. No, unless it sells VAT taxable goods

Answer: (B)

For a business that exclusively sells VAT exempt goods, the general rule is that it cannot register for VAT. This is primarily because VAT registration is typically intended for businesses that make taxable supplies, which are subject to VAT. Being VAT exempt means that the goods are outside the scope of VAT, and therefore, the business does not have any VAT to charge on its sales and cannot reclaim any VAT on its purchases. Consequently, even though there are certain scenarios and exceptions where businesses might consider VAT registration, the specific situation where a business only sells VAT exempt goods does not allow for registration. This is rooted in the intention of the VAT system, which is to collect tax on taxable transactions, not on exempt ones. Other contexts, such as those involving specific thresholds can provide conditions under which registration might be possible, but these would typically relate to mixed businesses that deal in both exempt and taxable goods rather than a business exclusively trading in VAT exempt goods.

For a business that exclusively sells VAT exempt goods, the general rule is that it cannot register for VAT. This is primarily because VAT registration is typically intended for businesses that make taxable supplies, which are subject to VAT. Being VAT exempt means that the goods are outside the scope of VAT, and therefore, the business does not have any VAT to charge on its sales and cannot reclaim any VAT on its purchases.

Consequently, even though there are certain scenarios and exceptions where businesses might consider VAT registration, the specific situation where a business only sells VAT exempt goods does not allow for registration. This is rooted in the intention of the VAT system, which is to collect tax on taxable transactions, not on exempt ones.

Other contexts, such as those involving specific thresholds can provide conditions under which registration might be possible, but these would typically relate to mixed businesses that deal in both exempt and taxable goods rather than a business exclusively trading in VAT exempt goods.