Definition of "Taxable Person"

Someone is a taxable person if they are VAT registered or required to be (per VATA s3). Exactly when does someone becomes a taxable person though. Is it the date they exceed the VAT registration threshold* or is it their EDR (and therefore there's a month delay between exceeding the VAT registration threshold and becoming a "taxable person"). So say a sole trader exceeds the historic £85k test on 31 January, their EDR is 1 March. Are they a "taxable person" in February? Or not until 1 March? Thanks *(assuming they exceed VAT reg threshold on hisotoric basis; ignoring anyone who goes over on the look froward basis and NETPs as their EDR would be the same as the date these exceed the threshold anyway)

Useful guidance here in HMRC internal manuals https://www.gov.uk/hmrc-internal-manuals/vat-taxable-person/vtaxper22000

Thanks Jason. I'm not sure that explains s3 any more though to be honest.

Hi Sally Galbraith,
A taxable person is a person or entity who, is or required to be, VAT registered.
So if a trader exceeds the threshold at the end of January then they would become a taxable person on that date and then become VAT registered with an effective date on 1st March.
Is there a reason why the date the person becomes a taxable person significant?
Thank you.

 

Hi. Thank you. That makes sense to me :)

The reason for asking is for those instances when someone incorporates (or otherwise changes entity type) just before becoming a "taxable person" thereby meaning the new entity starts from zero taxable turnover - effectively they can delay their need ot VAT register for a numbe of months (obviously keep doing this would be abusive). We have seen people online suggesting that if a sole trader went over 31 Jan, but incorporated part-way through February, the NewCo's taxable turnover would atart from scratch. Your reply confirms you think they would inherit the turnover however. Thanks,