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
- What to say to Tom, Dick and Harry... 234 1
- EU eservices VAT change imminent 320 6
- VAT Tax Point - Overseas Purchase 139 4
- VAT surcharges and change of business entity 15 1
- Recourse to Accountant for incorrect accounts 2,359 20
- Should I move back home away from my office? 494 10
- Property income in different capacities 134 2
- ethical- to continue to act or not? 245 6
- Contract Hire of Vans for Limited Company 89 1
- Recharge for private use of a company car 422 10
- SATR - ommission of capital gains 148 1
- Scanners 185 4
- Overdrawn Directors Loan Account 151 1
- Solar panels - VAT and Capital allowances 247 3
- Payment plans for clients 168 2
- General rule: Evidence that the customer is in business 249 1
- Do most of you still use MS Office? 299 7
- Are any of you agents for doctors? 397 2
- P60 or payslips? 131 1
- IHT dilemma 1,392 21
- Auto enrolment excuses 1,179
- Feedback on accounts production software for IFRS 800
- Add T&Cs to Sales Order in Sage 494
- Digita Hosted Software 322
- Credit where credit's due....... 280
- Director phone costs 242
- Buying goods in US and selling them to company in US 229
- Flat rate VAT- other income calculation 161
- how to object to registered company name... 145
- Double taxation relief - same income, different individual 142