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A person may become liable to be registered in respect of distance sales under:

• Schedule 2, paragraph 1(1) (the backward look)
• Schedule 2, paragraph 1(2) (the exercise of an option), or
• Schedule 2, paragraph 1(3) (the supply is of excisable goods).

Backward look

Schedule 2, paragraph 1(1) provides that a person becomes liable to be registered under this schedule on any day if, in the period beginning with 1 January of the year in which that day falls, that person has made relevant supplies whose value exceeds [the distance selling threshold].

Traders may therefore be liable to register at any time during the calendar year, as soon as the threshold is exceeded, but their liability calculation starts afresh at 1 January each year. Unlike Schedules 1 and 3, the person is liable to register on the day the threshold is exceeded rather than at the month end.

Option

Schedule 2, paragraph 1(2) provides that a person becomes liable to be registered under this schedule at any time if:

• they have exercised an option in the Member State of origin to treat relevant supplies as being made in the UK, and
• they make such a supply.

Excisable goods

Schedule 2, paragraph 1(3) provides that a person becomes liable to register under this schedule where the person makes any supply of excisable goods that would otherwise satisfy the ‘relevant supply� conditions at VATREG41150. There is no threshold for excisable goods.