VAT Deregistration

A compulsory VAT deregistration is usually required where a VAT registered business:

• Stops making taxable supplies

• Sells a business

• Changes legal status

• Disbands a VAT group

• Joins a VAT group

• Joins the agricultural flat rate scheme

In some circumstances, it may be possible to keep the existing VAT registration number. A voluntary deregistration can be made by businesses that do not expect their taxable turnover to exceed the deregistration limit. The current deregistration limit is £83,000. Businesses must cancel their VAT registration within 30 days if they are no longer eligible or they risk being charged a penalty.

A VAT registration can be cancelled online or by completing form VAT7 Application to cancel your VAT registration and sending it by post to HMRC.

A business that deregisters can make late claims for input tax on services received whilst it was VAT registered (subject to the usual VAT time limits).

Taxpayers that are running a small business that has been adversely affected by the coronavirus pandemic might want to consider whether a voluntary deregistration from VAT would be beneficial.