Under what condition can a partnership be exempt from registering for VAT?

A partnership can be exempt from registering for VAT if it has less than £85,000 in taxable turnover from standard-rated supplies. The threshold of £85,000 is set by HMRC, and partnerships (and businesses in general) must assess their taxable turnover to determine if they exceed this limit within a 12-month period. If a partnership expects its taxable sales will remain below this threshold, it is not required to register for VAT, thus remaining exempt.

Choosing a figure lower than the established threshold, such as £83,000, as a condition for exemption is consistent with this VAT registration guidance. Establishing compliance under this provision helps prevent unnecessary administrative burdens for low-turnover businesses, allowing them to operate without VAT obligations until they reach the threshold.

The other options do not align with the relevant VAT registration requirements. For example, future income expectations or the registered address can’t solely justify VAT registration exemption, nor does being in a constant repayment position negate the need to register if turnover thresholds are met. Thus, the primary limit on taxable supply value is the determining factor for VAT registration exemption.