Deregistering for VAT

VAT thresholds are the subject of much speculation as the Government is concerned that many business owners are deliberately choosing to remain below the VAT registration threshold.

Whilst limiting your turnover in this way might seem counter-intuitive – surely you want your business to get as big as possible, it can make sense if you’re seeking to make a comfortable living rather than get rich.

If the turnover of your business is predicted to fall below £83,000 over the next year, it can voluntarily deregister for VAT.

You would also need to deregister from paying VAT if your business ceased to trade.

Voluntary deregistration

Your business can deregister if it expects taxable sales in the next 12 months to be less than the deregistration threshold, which is currently £83,000. A voluntary deregistration from VAT can take effect from a current or future date.

If you fail to specify a date, the deregistration will take effect from the date HMRC receives the application to deregister, or a later date as agreed with HMRC.

You can’t backdate deregistration, even if you’ve made a mistake in registering for VAT, or you could have applied to deregister earlier but didn’t for whatever reason.

Compulsory deregistration

If your business has ceased to trade and will not make future taxable sales, it must deregister from VAT with effect from the final day of trading.

There is scope though to extend this date and thereby capture some final purchase invoices for the purposes of reclaiming input VAT. It’s almost certain that there would be professional fees to pay, which arrive after a business makes its last sale.

If you’d like to discuss this further with us then contact us via the number at the top of the page.


This article is for general guidance only. It provides an outline, and may not include points which are important to your situation. You should not depend on this blog without taking advice based on the full facts of your case. The information given was correct at the time of publication.

DID YOU FIND THIS USEFUL?

Share it with your network:  

Want more great content?
Sign up to our newsletter

    Follow us

    Tweets by @CHW-accounting

    CHW-Accounting
    @chw-accounting


    Twitter: chw_accounting

    WHAT'S THE NEWS?

    Grab a biscuit and a brew and read our latest news.

    19 February 2024

    Tax changes – What’s new in 2024?

    by

    We are now well and truly into 2024 and before you know it the end of the 2023/24 tax year on 5 April will be upon…


    Read more >

    12 February 2024

    National minimum wage – a quick guide to the...

    by

    The government sets a national minimum wage and a national living wage to guarantee that workers get a minimum standard of pay. It is a legal…


    Read more >

    7 February 2024

    HMRC to target undeclared dividend payments

    by

    HMRC have advised the Chartered Institute of Taxation (CIOT) that they have commenced a ‘One to Many’ letter campaign directed at taxpayers who HMRC suspect may…


    Read more >

    7 February 2024

    One week on from Self-Assessment deadline

    by

    We are now a week on from the self-assessment filing deadline of 31 January and figures show that more than double the number of taxpayers failed…


    Read more >

    5 January 2024

    Cut to National Insurance from 6th January 2024

    by

    From Saturday 6 January, the average earner will be almost £450 a year better off according to the government.  However, the reality is that due to…


    Read more >

    YOUR CHALLENGES

    No matter what your challenge is, we’ve probably dealt with it before.



    Need an Accountant?

    Get in touch >


    Need an Accountant?

    Get in touch >


    Tax issues?

    Find out more >


    Tax issues?

    Find out more >


    Trying to grow your business?

    We can help >


    Trying to grow your business?

    We can help >


    Managing cashflow?

    We can help >


    Managing cashflow?

    We can help >


    Starting a business?

    We can help >


    Starting a business?

    We can help >


    Looking for funding?

    Need help with funding? >


    Looking for funding?

    Need help with funding? >


    Buying or selling a business?

    We can help >


    Buying or selling a business?

    We can help >


    Adopt the cloud?

    We can help >


    Adopt the cloud?

    We can help >


    What else can we do for you?

    We can help >


    What else can we do for you?

    We can help >
    CONTACT US

    Get in touch, no hard sell, just a brew, a biscuit and a chat.