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VAT FAQ

Can I deregister for VAT?

Yes, voluntarily once your expected turnover falls below £88,000, or you must deregister if you stop trading. Here are the routes out, and what your final return needs to include.

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There are a few different routes to coming off the VAT register, some voluntary, some required. Here is when each applies.

Turnover drops below £88,000

You can deregister voluntarily if you expect your taxable turnover for the next 12 months to fall below the deregistration threshold, currently £88,000.

You stop trading

Closing the business, selling it, or ceasing to make taxable supplies means you must deregister within 30 days.

You join a VAT group

If your business joins a VAT group registration, your standalone registration is cancelled as part of that process.

You change legal structure

Moving from sole trader to limited company, or vice versa, means the old registration is cancelled and a new one set up.

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Questions

VAT deregistration, answered

Can I deregister for VAT?
Yes. You can deregister voluntarily if you expect your taxable turnover for the next 12 months to stay below the deregistration threshold, currently £88,000, or you must deregister if you stop trading, sell the business, or stop making taxable supplies. Deregistration is done online through your VAT account and usually takes around 3 weeks for HMRC to confirm.
How do I cancel my VAT registration?
Cancel it online through your VAT online account, giving the reason and the date you want the cancellation to take effect. HMRC will confirm your final registration date and tell you when to submit your final VAT return, which must include VAT due on any business assets you still hold.
What is the VAT deregistration threshold?
You can apply to deregister voluntarily if you expect your taxable turnover for the next 12 months to be below £88,000. This is different from, and lower than, the £90,000 registration threshold, which is deliberate so businesses hovering around the line are not forced to register and deregister repeatedly.
Do I have to pay VAT on stock when I deregister?
Often yes. Your final VAT return must include VAT on the value of any business assets you still own if the total VAT due on them would be over £1,000, this catches stock, equipment and similar assets you reclaimed VAT on. It is worth getting this calculation checked before you file your final return.
How long does VAT deregistration take?
HMRC typically processes a deregistration application within around 3 weeks, after which you will get written confirmation of your final registration date. You must keep charging and accounting for VAT normally until that date, deregistration is not immediate the moment you apply.
Can I re-register for VAT later if I deregister now?
Yes, there is no restriction on registering again in the future if your turnover rises back over the threshold, or if it suits your business to register voluntarily again. Each registration is treated on its own facts, so deregistering now does not count against you later.

Related: do I need to register for VAT? · how long does VAT registration take?

Official guidance: Cancel your VAT registration, GOV.UK.

Thinking about deregistering?

We will check whether it is the right move, handle the cancellation, and get your final return right, including any VAT due on assets. Fixed fee, no obligation.

Get a fixed-price quote 01296 252341