VAT deregistration following TOGC - due within 30 days but late, is there likely to be a penalty?
My client, a sole trader, sold his business as a TOGC in December. He has held a VAT registration in his own name for many years and has operated two businesses through the same registration.
His plan was to deregister when he had finalised all the expenses for the business before the sale, on the basis that he was ceasing to make taxable supplies. I was finding the right form for him to complete when I noticed the fact that he should have notified compulsory deregistration within 30 days of the sale. The guidance states "You should be aware that if you fail to notify us of any changes affecting your registration details within 30 days of them occurring, you may become liable to a financial penalty"
It is now approx 70-80 days after the sale. When he completes the form it will trigger deregistration at the date of sale. He has already completed a VAT return to the end of January and expects to have no more expenses apart from my fees which I understand he would be able to reclaim via VAT 427 Claim for input tax relief from VAT on cancellation of registration.
The questions are
1. Is the client likely to be fined for late notification? If so, any idea how much?
2. What happens to the VAT return to end of January already completed if VAt deregistration is dated in December (all items on VAT return relate in some way to closing down the business and final payments in respect of expenses incurred before the end of trading)
3. What is the best way to handle this without me looking silly or the client getting into trouble? (I am not offically VAT agent as he has always done his own returns.)
Thank you for your help
- Where has Portia gone? 5,065 110
- Help 179 10
- Dividends from UK plc - tax years and dates 96 2
- What do people do with signed accounts/engagement letters/tax returns? 229 9
- Overlap profit 296 7
- Moneysoft or Sage payroll with auto enrolment? 320 6
- RTI Payroll ID 2,067 25
- What is the correct Vat treatment and rate to use to record a business stay in a hotel in the EU? 137 1
- Payments on account 188 2
- Recurring Revenue/Costs occurred before registering, how do I handle this? 86 1
- What do your junior staff do? 527 7
- OMG HMRC !!!! Employ some ppl!! 658 12
- Keeping disastrous accounts 417 5
- Is my client risking reputational damage? 540 10
- VAT Exemptions for Dance Education 132 1
- Getting fees, getting harder? 3,944 74
- In pratice using part time accountants 356 3
- On the high seas 116 1
- Entrepreneurs Relief Shares Received as Part of Divorce Settlement 149 2
- Spousal transfer and PPR 861 34
- Services via intermediaries and new HMRC reporting requirements 853
- How hard is it to reduce a code? 445
- Sanzar 344
- How do you do it 338
- Digital marketing focus group 313
- Kashflow balance sheet difference 296
- Bed & Breakfast trade via Limited Company 210
- Fit for purpose 203
- new investor structure 200
- VAT Registration 181