Cancelling a VAT registration ― points to consider

Produced by Tolley

The following Value Added Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Cancelling a VAT registration ― points to consider
  • Stock and business assets
  • Land and property
  • Transfer of a business as a going concern
  • Businesses joining the agricultural flat rate scheme
  • Capital goods scheme (CGS)
  • Calculating the VAT due
  • Final VAT return
  • Partial exemption
  • Accounting schemes
  • More...

Cancelling a VAT registration ― points to consider

This guidance note provides an overview of certain specific points that need to be considered by a business that is intending to cancel its VAT registration number. This note should be read in conjunction with the Cancelling a VAT registration number guidance note.

Detailed information on cancelling a VAT registration number can also be found in HMRC Manual VATDREG01000.

Stock and business assets

If a business has stock and business assets on hand at the time it cancels its VAT registration number, then it may be required to account for VAT on the value of those assets on its final VAT return.

A business will not be required to account for any VAT if the total VAT due on the stock / business assets is £1,000 or less.

If the VAT due on the assets / stock exceeds the de minimis limit, the business will need to consider the following:

Reason for cancelling the VAT numberAction required
The business has been closed downVAT must be accounted for on the value of the stock and business that are still owned by the business at the time the VAT registration number is cancelled. The VAT must be included on the final VAT return completed and submitted by the business
The turnover has fallen below the VAT registration thresholdVAT must be accounted for on the value of the stock and business assets that are still owned by the business at the time the VAT registration number is cancelled. The VAT must be included on the final VAT return completed and submitted by the business

The business must ensure that it considers all of the assets and stock on hand at the time the VAT registration is cancelled (for example, any interests in land if they are liable to VAT at the standard or reduced rates). The business must also consider any tangible business assets, such as office furniture, commercial vehicles, etc,

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