deregister for VAT

How to Deregister for VAT in the UK?

16/02/2023Tax Saving Tips , Taxation , VAT

The pace of business is like a roller coaster as it is quite unpredictable. It can rise and come down in the blink of an eye. This is when you decide to get your business registered for VAT because the business turnover has gone up a certain limit and you feel like getting the benefits of a VAT registration by charging VAT on the products you are selling. However, the same situation can be changed in no time you are struggling with the turnover going lower than the certain limit and you now need to deregister for VAT. This happens especially among new business start-ups or small businesses. However, people are normally not quite familiar with the right process of VAT registration in the UK.

Realising the need we have designed this comprehensive guide which will cover imperative points in the discussion. This could possibly involve a discussion on the reason to deregister for VAT, when is the right time to get deregistered, how to cancel registration for VAT, what is the scenario after VAT cancellation, and how transferring VAT registration possible between the businesses.


Reach out to one of our professionals to get to know about how to deregister for VAT in the Uk. Get in touch and you will be provided instant professional help!


What is the Reason to Deregister for VAT?

This is a common awareness among people that the business needs to be registered for VAT when the turnover of the company reaches a certain limit. There comes a scenario in your business journey when you are registered for VAT but then the turnover starts to go down. This brings in the requirement of getting deregistered for VAT. You will have to opt for the cancellation of VAT registration because you no more qualify for the criteria of getting registered for VAT because of the low turnover of your company.

The reason for the company turnover going low could be because of the low business activity or the business has stopped trading. Also when the VAT sales are not made and the rules are not implemented in this case, you are simply no longer in a position to charge VAT on the products you are selling.


What is the Right Time to Deregister for VAT?

Once you find out that your business turnover has gone down a certain limit, you must initiate the process as soon as within the limit of a month. This is because you are no longer on the list of eligible VAT registration.


How to Cancel the Registration for VAT?

After you have decided to deregister your business for VAT because of being ineligible, all you have to do is to log into your VAT online account and do the needful. This account is also known as a government gateway account. Some business owners like to do it by post. In this scenario, you will have to require a VAT7 form, fill it and send it to the required address.


What will Happen After the Cancellation of VAT Registration?

When you have approached HMRC to inform them about the low business turnover and initiated the process of VAT registration of your company, HMRC will take a normal time limit of three weeks to send a confirmation that your business is deregistered. The official date of VAT deregistration will be considered when your business stopped trading or when you informed HMRC voluntarily about the issue.


What will be the Scenario of Transferring the VAT Registration?

This is quite possible to transfer the registration of VAT from your business to another business. This is common for situations where an individual buys a new business and aims to use the old VAT registration number. The transfer of the VAT registration number can be done online as well. However, if you will like to do it by post, you will need to fill out the form VAT 68 and send it to HMRC. Being the business buyer you must get in touch with HMRC and inform them about the new change. The seller of the business requires to do the same. The direct debits on the old accounts must be cancelled as well. The transfer process takes a period of three weeks normally by HMRC.


The Bottom Line

Now that you have gathered a fair amount of information about how to deregister for VAT in the UK, we can bring the discussion towards wrapping up. It is imperative for a company to deregister for VAT once it finds out about the low-income turnover. It becomes mandatory to get in touch with HMRC and get them notified about this change. This is because you are now ineligible to be VAT registered. HMRC will require a period of three weeks normally to complete the process. We hope these few minutes of reading will help you to develop a better understanding and you will be able to handle the VAT deregistration well in the future.


Are you seeking professional help to know how to deregister for VAT in the UK for a small business? Why not get help from the experts at the CruseBurke? Talk to us now and we will get back to you instantly.


Disclaimer: The general information provided in this blog about how to deregister for VAT in the UK includes text and graphics. It does not intend to disregard any of the professional advice in the future as well.

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