Cancelling your VAT registration

Transcription

1 1 of 6 05/11/ :10 Skip to main content Cancelling your VAT registration There are a number of situations in which you must cancel your VAT registration, such as if you stop making taxable supplies. In some circumstances you can voluntarily cancel your registration. This guide explains how you should go about cancelling your VAT registration, and how you should account for VAT after your registration is cancelled. On this page: How to cancel your VAT registration The date cancellation will take effect What happens when your registration is cancelled? Accounting for VAT after your registration is cancelled How to cancel your VAT registration You must tell us that you need to cancel your VAT registration and explain why within 30 calendar days of the reason for cancellation arising. Make sure that you write to us within this time limit, and avoid being liable for a financial penalty. You can cancel your VAT registration by completing form VAT 7 and returning it to us. We should respond to you within three weeks of you sending in the form. If you don't receive a response, then you should contact us at the same address. Send you form VAT 7 to the following address: Grimsby National Registration Service HM Revenue & Customs Imperial House 77 Victoria Street Grimsby DN31 1DB

2 2 of 6 05/11/ :10 If you are not based in the UK, you should send your VAT 7 to: Non Established Taxable Persons Unit (NETPU) HM Revenue & Customs Ruby House 8 Ruby Place Aberdeen AB10 1ZP Obtain form VAT 7 'Application to cancel your VAT registration' Read our guide on changes in circumstances that could mean you have to cancel your VAT registration The date cancellation will take effect Compulsory de-registration Your registration will be cancelled from the date corresponding to whichever of the following applies to the circumstances of your cancellation: you cease making taxable supplies your intention to make taxable supplies ceased you sell your business your legal status changes you disband your VAT group you join a VAT group you join the Agricultural Flat Rate Scheme Read our guide on changes in circumstances that could mean you have to cancel your VAT registration Voluntary de-registration If you want to de-register voluntarily, then you need to tell us the date when you want your VAT registration to stop. This will be either the date when we receive your request or an agreed later date. You should continue to charge and account for VAT until we confirm we have cancelled your registration. If we don't accept your request to cancel your VAT registration, you'll

3 3 of 6 05/11/ :10 have to continue charging for and accounting VAT. You must notify us promptly if you become liable to be registered at any time in the future. There are penalties for failing to register at the proper time. See our guide on when you must register for VAT and when you may voluntarily register If you cancel your registration in error If you cancel your registration in error, let us know. What action we take depends on the exact circumstances in which your registration was cancelled. If we discover that you supplied false or misleading information in order to cancel your registration, we will take action to re-register you, and you will be responsible for accounting for any VAT due from the date of re-registration. Read our guide on changes in circumstances that could mean you can cancel VAT registration What happens when your registration is cancelled? If we're satisfied that your VAT registration should be cancelled, then you will be sent one of the following: a formal notice of cancellation - form VAT 35 a formal notice of exemption from registration - form VAT 8 These forms confirm the date your registration is cancelled. They become part of your VAT records and must be kept for six years, along with your other VAT records. You will also receive a final VAT return form - form VAT 193 or its Welsh equivalent, form VAT 197. You must fill this in, including VAT due on stocks and assets, and return it by the due date. Don't wait until you have received all your invoices before submitting your final return. If you receive more after you send it, you can claim for input tax. If you have already accounted for all or part of the VAT due for the final

4 4 of 6 05/11/ :10 period on your normal VAT return form, you must consult us before completing your final return. When you cancel your registration, you must also account for VAT on stock and certain assets you have at the close of business on the day your VAT registration is cancelled. Once you have cancelled your VAT registration, you must no longer charge VAT on goods or services you sell or use VAT invoices. You may be able to reclaim VAT on some invoices that you receive after your registration ends. Find out about reclaiming VAT after de-registration Read about accounting for VAT when you close your business Accounting for VAT when your registration is cancelled When you cancel your registration, you must account for VAT on stock and certain assets you have at the close of business on the day your VAT registration is cancelled. You'll need to include assets like interest in land - but only where supplies, if made, were taxable - and tangible goods on which you could reclaim VAT when you bought them. Tangible assets include items like unsold stock, plant, furniture, commercial vehicles and computers. You don't need to worry about intangible assets like patents, copyright and goodwill. If you obtained goods free of VAT as assets of a business transferred to you as a going concern from a taxable person, then you must include them in your VAT calculations. If you obtained land or buildings as assets of a business transferred to you as a going concern, then you must account for VAT on them if you have 'opted to tax'. You should exclude items on which you couldn't reclaim VAT when you bought them. These may be: goods bought from unregistered businesses cars - except private taxis, self drive hire cars and driving school cars on which input tax has been claimed

5 5 of 6 05/11/ :10 goods bought under a VAT second-hand scheme goods used wholly for business entertainment goods which have been directly attributed to an exempt business activity - unless some input tax relating to these goods was reclaimable through the partial exemption rules land or buildings which were obtained VAT free even though you may be using them to make standard-rated supplies, such as holiday accommodation or because you have opted to tax the property goods not bought for business purposes goods bought before VAT was introduced on 1 April 1973, which were not relieved of Purchase Tax or Revenue Duty Items under the Capital Goods Scheme If you have goods on hand when a registration is cancelled, we usually consider this to count as a supply. So if you own any capital items when you cancel your registration you may be required to make a final adjustment in respect of any items still within the adjustment period. This adjustment should be made on your final return. If you are in any doubt about whether or not you have to make an adjustment, you should contact us. Find out more about the Capital Goods Scheme in VAT notice 706/2 How to work out the VAT due You can work out the VAT you owe by valuing the relevant land or goods at the price you would expect to pay for them in their present condition. If you can't work this out, then you should use the price you would expect to pay for identical or similar land or goods. If you can't work this out, then you should use the price the goods would cost to produce at the time you cancelled your registration. If the total VAT on the relevant assets is 1,000 or less, you don't need to pay any VAT. So if the relevant assets are all standard rated, you don't have to account for VAT if their total value including VAT is 6,714 or less. If they're worth more than this, then you must account for VAT on all the goods you have on hand on your final VAT return. Make sure that you don't under declare the VAT due on your final VAT return, as this could lead to a fine. How to work out the VAT if you are partly exempt If you are partly exempt, the final adjustment period - your

6 6 of 6 05/11/ :10 de-registration period - will run from the day following your last full tax year to the date of de-registration. However, if you haven't incurred any exempt input tax in your previous tax year - or where applicable, the registration period immediately preceding your de-registration period - the final adjustment period will run from the first day of the accounting period in your final tax year in which you first incur exempt input tax to the date of de-registration. Read more about partly exempt businesses in our guide to VAT exemption and partial exemption How to work out the VAT if you use the Cash or Annual Accounting Schemes Special rules apply if you use the Cash Accounting or Annual Accounting Schemes. Read more about the Annual Accounting Scheme Read more about the Cash Accounting Scheme More about accounting for VAT when you close your business in VAT Notice 700/11