VAT deregistered... What to do now with sales??

VAT was deregistered because we didn't respond to MDT letter. How can we continue doing business.

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Hoping I can find an answer here as my accountants are doing the best they can with HMRC, but it seems like HMRC make things as complicated as possible.

 We tried to submit VAT recently, however, HMRC said our VAT number was invalid. Gave them a call and apparently in Jan they cancelled our VAT as we didn't respond in time to a MDT letter. I never received this letter, and neither did my accountant. No emails or calls either from them. This could've happened due to an office move we had, the strikes or a slip up from the post man as we are incredibly due diligent with mail.

I managed to speak to HMRC who told me that we can ask for the VAT number to be reinstated or just apply for VAT again. However, last time we did this it took nearly three months.

So, what (as a business) are we supposed to do in the meantime? We (luckily) didn't have any VATable sales when we initially applied for VAT in August-November. However, we're now dealing with some very large organisations who we've charged VAT on after we got VAT cancelled, and we have over 60k of sales coming up which was quoted back in Dec with VAT. 

Exlaining this fumble to our clients accounts team could lead to us being dropped as a supplier. Do we redo invoices where we charged VAT or do we leave it and back date VAT once we reapply?

I can imagine if a business relied solely on VATable sales this could put them under, surely there's a way to survive during the limbo period?




Replies (5)

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By lionofludesch
03rd May 2023 21:32


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Replying to lionofludesch:
By Leywood
03rd May 2023 21:45

Missing a P.

OP - your Accountant can advise what to do in the meantime.

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Replying to Leywood:
By Kennymckormick97
03rd May 2023 21:53

Apologies. The "making tax digital" thing. He'll be speaking to HMRC for advice but I assume they'll give the "you can't charge VAT but you'll have to pay VAT" line, which makes things really difficult for business. I'm anxious for some further advice.

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By Jason Croke
03rd May 2023 23:12

Call the HMRC reinstatement line and ask them to reinstate your VAT number. That should be quicker than applying for a new VAT number.

What is the MTD thing/ issue that has caused you to be deregistered?

When seeking reinstatement you need to be clear what caused the problem that lead to being deregistered, fix that first then HMRC can feel confident in reinstating your VAT number.

If you've changed address and not told HMRC, then how can HMRC contact you? If you are due diligent when it comes to mail, how does that correlate with moving address and not updating the taxman? HMRC rarely, if ever, send copy letters to an Accountants so it's not a surprise your Accountant did not know.

Not sure I get your last post re "you can't charge VAT but you'll have to pay it"....makes no sense, don't speculate, just get onto HMRC and get reinstated or entrust with your Accountant.

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By Wanderer
04th May 2023 07:46

Sorry not much sympathy here, at present.

You describe yourselves as incredibly due diligent with certain matters but managed to overlook something regarding MTD for VAT.

What exactly was the 'MDT letter' that you didn't action concerned with? Bearing in mind you only registered in August - November MTD would have been at the centre of your setting up your VAT registration.

Reading (big time) between the lines was your first VAT return a reclaim? If so not following that through would most likely have been your issue, not the MTD aspects of VAT.

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