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When and how to de-register for VAT

Deregistering from VAT is an option if your business has registered for VAT but your turnover falls under the de-registration threshold of £83,000.

Why de-register for VAT?

You must register for VAT with HMRC if your business’ VAT taxable turnover is more than £85,000 (2018/19 tax year).

If your VAT taxable turnover falls below the de-registration threshold of £83,000, your business can ask HMRC to cancel its VAT registration.

You must cancel your registration if you’re no longer eligible to be VAT registered. 

This could happen because your business stops trading or you no longer make VAT taxable sales or if you join a VAT group. This, according to HMRC, allows: “Two or more corporate bodies to account for VAT under a single registration number with one of the corporate bodies in the group acting as the representative member.”

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When must you de-register for VAT?

  • You must cancel within 30 days if you are no longer eligible to be VAT registered.

  • If you’re no longer eligible and don’t cancel within 30 days – your business may have to pay a penalty.

How to cancel your VAT registration

You can cancel your VAT registration online by logging into your VAT online account (aka your “Government Gateway account“). 

Should you prefer to deregister for VAT by post, you can fill in and send form VAT7 to the address stated.

What happens after I cancel my VAT registration?

Normally it usually takes three weeks for HMRC to confirm your de-registration and the official de-registration date (ie when the reason for your cancellation took effect, for example, you stopped trading, or when you asked to de-register if this was voluntary).

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What if I want to transfer VAT registration?

You can transfer VAT registration from one business to another. You might do this if you buy a company and want to keep using its VAT number.

You can apply to transfer a VAT registration online (through your VAT online account) or by post should you prefer, using form VAT68.

You, the buyer of the business, as well as the seller of the business must notify HMRC. The seller should cancel any Direct Debits on their VAT online account and you (the buyer) should set up new ones. Normally it takes three weeks for HMRC to confirm the transfer.

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