Deregistering for VAT

A voluntary VAT deregistration can be made if you do not expect your taxable turnover to exceed the VAT deregistration limit. The current deregistration limit is £83,000.

If you are running a small business that has been adversely affected by the Coronavirus pandemic, this could be an opportune time to consider whether or not to voluntarily deregister. The deregistration cannot be backdated and must be from a current or future date where you expect sales in the next 12 months to be less than £83,000.

A compulsory VAT deregistration is usually required if you:

  • Stop making taxable supplies
  • Sell your business
  • Change legal status
  • Disband a VAT group
  • Join a VAT group
  • Join the agricultural flat rate scheme

You will be required to submit a final VAT Return for the period up to and including the VAT deregistration date.

If you are considering voluntarily cancelling your VAT registration, there are a number of issues that must be considered. Whether or not this is a good idea depends on your specific circumstances. We would be happy to help you consider your options.

If you mainly sell goods or services to individuals who have not been able to reclaim the VAT you charge, deregistration may help you to restore a competitive advantage.

 



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A compulsory VAT deregistration is usually required if you:

  • Stop making taxable supplies
  • Sell your business
  • Change legal status
  • Disband a VAT group
  • Join a VAT group
  • Join the agricultural flat rate scheme

A voluntary VAT deregistration can be made if you do not expect your taxable turnover to exceed the VAT deregistration limit. The current deregistration limit is £83,000. 

You will be required to submit a final VAT Return for the period up to and including the VAT deregistration date.

You must account for any stock and other assets you have on this date if:

  • you could reclaim VAT when you bought them,
  • the total VAT due on these assets is over £1,000.

You can also make late claims for input tax on invoices received relating to the period that you held a VAT registration. This can be done after the final VAT return has been submitted (subject to the usual VAT time limits).



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