Deregistering from VAT (Value Added Tax)

Deregistering from VAT should be considered if your business no longer meets the requirements for VAT registration. This could be due to ceasing trading, selling your business, or falling below the VAT threshold.

To be eligible for deregistration, your business must meet certain criteria. You can deregister if your taxable turnover for the next 12 months is expected to be below the VAT deregistration threshold, which is currently £85,000. It is important to assess your business’s financial projections to determine if deregistration is appropriate.

To begin the deregistration procedure, you must notify HMRC by filling out the HMRC VAT deregister form. Form VAT7 is the most commonly used form for deregistration. This form is available on the HMRC website or by calling the VAT hotline. Here is the link to download the form or submit it online

– Determine if deregistration is appropriate for your business based on financial projections and eligibility criteria.

– Obtain Form VAT7 from the HMRC website or by contacting the VAT helpline.

– Complete Form VAT7, providing accurate and complete information, including your VAT registration number, business details, and the effective date of deregistration.

– Determine the effective date of deregistration, which might be the date of application receipt or a future date within 30 days.

– Submit your deregistration application online through HMRC’s VAT online services or by mailing the completed form to the address provided.

– Await confirmation from HMRC regarding the acceptance of your application.

– Prepare and submit a final VAT return, accounting for all outstanding VAT due and any VAT reclaims.

– Notify your customers and suppliers in writing about your deregistration from VAT and update your business documents accordingly.

– Consider any new implications, such as changes to the VAT Flat Rate Scheme, and seek expert advice if necessary.

– Maintain records of your deregistration and comply with any further obligations as advised by HMRC.

Form VAT7 asks for information such as your VAT registration number, business name, contact information, and the date of deregistration. If HMRC requests it, you must also explain why you are deregistering and submit any supporting papers.

The effective date of deregistration is the date you no longer have to charge VAT on your sales. It might be the date HMRC received your application or a future date within 30 days of filing the application.

Yes, you can use HMRC’s VAT online services to file your deregistration application. This is the quickest and most straightforward method of VAT deregistration. Alternatively, you may fill out the paper form and mail it to the address on the form.

Once your deregistration application is received, HMRC will review the information provided. They may contact you for additional information or supporting documents if necessary. If everything is in order, HMRC will process your application and confirm your deregistration.

Yes, you are required to submit a final VAT return for the period up until the effective date of deregistration. This return should include all outstanding VAT due on your sales and any VAT reclaims you are entitled to make.

It is important to inform your customers and suppliers about your deregistration from VAT. You should update your invoices, contracts, and other business documents to reflect the change. Notify your customers and suppliers in writing, explaining that you are no longer VAT registered and how this affects future transactions.

Depending on your company conditions, there may be additional considerations when deregistering from VAT. For example, if you purchased goods or services subject to the VAT Flat Rate Scheme, you may be required to account for the VAT on such purchases. It is essential that you obtain professional assistance to verify that you are in compliance with all applicable requirements.