VAT deregistration
Produced in partnership with Pinsent Masons
VAT deregistration

The following Tax guidance note Produced in partnership with Pinsent Masons provides comprehensive and up to date legal information covering:

  • VAT deregistration
  • Making supplies in the UK—compulsory deregistration
  • Making supplies in the UK—voluntary deregistration
  • Distance sales, relevant acquisitions and relevant supplies—compulsory deregistration
  • Distance sales, relevant acquisitions and relevant supplies—voluntary deregistration
  • Accounting for VAT on business assets and stock on cancellation of registration
  • Option to tax
  • Transfer of a business as a going concern
  • Changes to a VAT group
  • After deregistration

FORTHCOMING CHANGE relating to VAT registration threshold: In response to the OTS’ recommendation that the VAT registration threshold be examined, the government issued a call for evidence on the threshold for VAT registration. The call for evidence sought views on how the threshold might affect business growth, the burdens created by the VAT regime at the point of registration and possible policy solutions. The call for evidence closed on 5 June 2018 and a summary of responses was published at Budget 2018. As the responses did not provide a clear option for reform, the government has decided to freeze the thresholds in order to provide businesses with certainty, and will review the possibility of introducing a smoothing mechanism once Brexit terms are clear. The thresholds for VAT registration and deregistration will be maintained at £85,000 and £83,000 respectively until 31 March 2022.

A person who is registered for VAT in the UK may be deregistered (ie their VAT registration may be cancelled) on a compulsory or voluntary basis.

This Practice Note looks at:

  1. the rules on when a business can, or must, have its VAT registration cancelled

  2. the consequences of deregistration, and

  3. how deregistration interacts with the rules on the option to tax land, transferring a business as a going concern and VAT groups

The rules on deregistration will depend on the reason