If your business is no longer required to be VAT-registered, or if you’re winding things down, you might consider cancelling your VAT registration with HMRC. Here’s a straightforward guide on how to do it and what to expect.

When Can You De-register for VAT?

You can apply to cancel your VAT registration if:

• Your VAT taxable turnover drops below the deregistration threshold (£88,000 as of 2024), or
• You’ve stopped trading, sold the business, or changed business activities to become VAT exempt.

Note: If your business closes or stops making taxable supplies, deregistration is compulsory.

How to De-register for VAT

To cancel your VAT registration, please follow these steps:

Step-by-Step: De-registering for VAT Online

1. Log in to your HMRC VAT online account

• Go to: https://www.gov.uk/log-in-register-hmrc-online-services
• Use your Government Gateway ID and password to access your VAT services.

2. Select your VAT account

• Once logged in, click on your VAT section from your business tax account dashboard.

3. Find the option to cancel your VAT registration

• Look for the link or section that says “Cancel VAT registration” or something similar.

4. Provide a reason for cancelling

HMRC will ask you to choose or describe why you’re de-registering. Examples:

• My turnover is below the threshold
• I’ve stopped trading
• I’m closing or selling the business
• My supplies are now VAT exempt

5. Enter your cancellation date

This is the date you want your VAT registration to end.

• It can be the date you stopped trading or the date your turnover fell below the threshold.
• HMRC may adjust it slightly if needed.

6. Submit your request

Review your answers and confirm the cancellation request.

After You Submit

• HMRC typically responds within 3 weeks.
• They’ll send confirmation and let you know if you need to submit a final VAT return.
• You must stop charging VAT from the cancellation date onwards.

What If You Still Have VAT Able Assets?

If the total VAT due on business assets is over £1,000, you may need to pay VAT on them when you deregister (e.g. stock or equipment you keep after deregistration).

Final Thoughts

De-registering from VAT can have cash flow and invoicing implications. Always speak to an accountant or tax advisor before making the move. Need help with your VAT returns or deregistration? Pro Taxman can guide you through every step.