When and how to de-register for VAT

Updated on May 14, 2022

If your firm has registered for VAT but your turnover falls below the de-registration threshold of £83,000, you have the option of de-registering from VAT.

Why de-register for VAT?

In the 2021/22 tax year, if your VAT taxable turnover is more than £85,000, you must register for VAT.

As a firm, you can petition HMRC to cancel your VAT registration if your VAT taxable revenue falls below the de-registration threshold of £83,000.

If you are no longer qualified for VAT registration, you must terminate your registration.

If your business is no longer in operation, or if you no longer produce VAT taxable sales, or if you join a VAT group, this could result in you being charged VAT. “Two or more corporate bodies can account for VAT under a single registration number, with one of the corporate bodies serving as a representative member,” according to HMRC.

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When must you de-register for VAT?

Money and forms

How to cancel your VAT registration

You can cancel your VAT registration online by logging into your VAT online account (aka your “Government Gateway account“).

Should you prefer to deregister for VAT by post, you can fill in and send form VAT7 to the address stated.

What happens after I cancel my VAT registration?

For HMRC to confirm your de-registration and the formal de-registration date, it typically takes three weeks (ie when the reason for your cancellation took effect, for example, you stopped trading, or when you asked to de-register if this was voluntary).

What if I want to transfer VAT registration?

You can transfer a company’s VAT registration to another. If you’re buying a business and want to preserve its VAT number, you might do this.

To transfer a VAT registration, you can do it online (through the website of your VAT online account) or by mail (by form VAT68).

You, the buyer, and the seller of the firm both have to notify HMRC of the transaction. You (the buyer) should set up fresh Direct Debits and the seller should delete any already set up on their VAT online account. HMRC typically confirms transfers within three weeks.

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