How to deregister for VAT

VAT deregistration can be done via your online account and is the simplest and quickest way to do so, in most cases.

If your business has ceased to trade, it is a simple process to inform HMRC. You will need to enter the date you wish to deregister from and declare the value of any stocks and assets that remain at this date. If the VAT value of these items is over £1,000 then you must account for VAT. This includes any land or property on which there is an option to tax.

If someone takes over your business and does not wish to keep the current VAT number, you should select ‘Transfer as a Going Concern’ as your reason for deregistration and ensure you tick ‘no’ when asked if the new owner wishes to keep the VAT number.

If you are changing legal entity e.g. from a partnership to a limited company, you may choose to keep the current number but it will need to be ‘moved’ to the new entity. This can be done via your online account but, currently, there are significant delays to this process so it may be preferable to complete the forms (VAT 1 and VAT68) manually.

The date of deregistration will be the date when you ceased to trade or when the transfer took place. If you deregister because you are trading below the threshold, the date can only be a current or future date.

Once HMRC has accepted your deregistration request, it will take a few days to process and you will be issued with a final return. This is usually only accessed via your Government Gateway account. This final VAT period will run from the date of the last VAT return submitted to the date you ceased to trade, as entered on your deregistration request. This is also when you should declare the output tax on any relevant stocks and assets.

You must not quote your VAT number or charge VAT once the VAT number has been cancelled.

There may be circumstances when there is VAT to reclaim after you have deregistered:

• You receive purchase invoices for goods received when you were VAT registered but were omitted from the final return or received late
• You incur costs on certain services you bought after you cancelled your VAT registration
• There are bad debts that you identified after you cancelled your VAT registration

You can still claim this VAT by completing a VAT427, which you can access here.

For further guidance in this process, contact our VAT advisors today. If you’re unsure whether you need to register for VAT or not, read our latest article: Do I need to register for VAT?