The VAT notice on deregistration has been updated. The notice entitled ‘Cancelling your registration’ is meant to provide details to VAT registered businesses as to how to cancel their VAT registration. There are different procedures that apply where the cancellation of aVAT registration is compulsory or voluntary.
A compulsory deregistration is usually required where a VAT registered business:
- Stops making taxable supplies
- Sells its business
- Changes legal status
- Disbands a VAT group
- Joins a VAT group
- Joins the agricultural flat rate scheme
A voluntary deregistration usually follows the reduction in a business’s taxable turnover to below the current deregistration limit of £66,000.
HMRC’s notice has been updated to reflect the changes in time limits introduced from 1 April 2009. A business that deregisters is able to make late claims for input tax on services received whilst it was VAT registered. The time limit has been extended from 3 years to 4 years with a cap of 31 March 2006 (as the legislation did not apply retrospectively).