Consequences of deregistration
V7.159 Output tax on stock and assets held at time of VAT deregistration
When a business deregisters from VAT, it must account for output tax on any stocks and assets held at the time of deregistration. However, VATA 1994, Sch 4, para 3 specifies that no output tax is due if the total output tax on such stocks assets would be less than £1,000 (ie gross value of less than £6,000 at a VAT rate of 20%).
With regard to these rules, there are a number of important points to take into account, all of which help to reduce the output tax liability, in many cases to zero:
• output tax is not due on any stocks or assets
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