Section B - Case 1 (NovaStream Ltd)

NovaStream Ltd, a UK tech startup providing cloud services, commenced trading on 1 January 2023. Its taxable supplies were exactly £10,000 per month.

By what date must NovaStream Ltd notify HMRC of its liability to register for VAT under the historic test?

Under the historic test, a business must register for VAT if its taxable supplies in the previous 12 months exceed £85,000. NovaStream's cumulative supplies reached £80,000 at the end of August and £90,000 at the end of September. Therefore, the threshold was exceeded on 30 September 2023. The company must notify HMRC within 30 days, which is 30 October 2023.