How do I deregister for VAT?

By

Chris Andreou

Contents

How do I deregister for VAT?How do I deregister for VAT?

You can cancel your VAT registration online, or by sending form VAT7 via post.

How to Deregister for VAT in the UK:

VAT (Value Added Tax) is a tax that is applied to goods and services in the UK. It is a complex and often confusing system, so understanding how to deregister for VAT is essential for any business. This article will explain the process of deregistering for VAT in the UK, and the implications of doing so.

Why Would I Need to Deregister for VAT?

There are a few reasons why you may need to deregister for VAT. The most common is if your business is no longer trading, or if it is no longer making taxable supplies. You may also need to deregister if your business has become inactive, or if you have moved abroad.

What Are the Steps to Deregister for VAT?

The process of deregistering for VAT is relatively straightforward. The first step is to inform HM Revenue & Customs (HMRC) that you wish to deregister. You can do this by completing form VAT 7 and sending it to HMRC. You should also include any outstanding VAT returns and any other relevant documents.

Once HMRC has received your form, they will assess your application and decide whether or not to deregister you. If your application is successful, you will receive a letter from HMRC confirming your deregistration.

What Are the Implications of Deregistration?

When you deregister for VAT, you will no longer be able to charge VAT on goods or services that you sell. This could mean that you will lose out on some of your profits, as you will no longer be able to add the VAT to the prices of your goods or services.

You will also no longer be able to reclaim any VAT that you have paid on purchases. This could have a significant impact on your cash flow, as you will no longer be able to reclaim the VAT that you have paid on items such as stock or equipment.

It is important to note that you will still be liable for any VAT that you have charged on goods or services that you have sold before your deregistration. You will need to pay any outstanding VAT to HMRC before you can deregister.

Can I Re-register for VAT?

Yes, you can re-register for VAT if your circumstances change and you are once again liable to charge VAT. You can do this by completing form VAT 1 and sending it to HMRC.

Conclusion

Deregistering for VAT can be a complicated process, but understanding the implications and the steps involved is essential for any business. If you are considering deregistering for VAT, it is important to ensure that you have informed HMRC and paid any outstanding VAT before you do so. You should also consider the implications of deregistering, as this could affect your profits and cash flow. Finally, you should be aware that you can re-register for VAT if your circumstances change.

You can cancel your VAT registration online, or by sending form VAT7 via post.

Read more of our free business tax guides

Business accountant available for free consultation

Get a free accounting consultation

We'll walk through everything you need for starting or switching.