VAT registration: Tips for deregistration
In the final article of this series on VAT registration, Neil Warren highlights some potential tips and pitfalls with deregistration.
You might also be interested in
Replies (4)
Please login or register to join the discussion.
I have a position where a service business normally has 2/3 client contracts in a year but these expired and, although the intention was to win more business, it did not do so. We are now 6 months on and the decision has been made to close down. When did the company cease to trade for VAT purposes? Were they right to claim input tax on (fairly minimal) activities in the 6 months?
I am the trustee of a cricket club .I 2007 we sold some land andwith the proceeds built a new clubhouse £350k , on which we recovered VAT on the various inputs .We have drink stocks of c.£2.6k.Our turnover is less than £80k fora few years .If we deregistered would we pay VAT on the value of the clubhouse + stocks or is there any time limit as the building was built 10 yeares ago
Any help appreciated
I always thought if you held stock and assets for over 10 years there was no additional vat to pay on desegregation.
Many thanks for this article Neil
Your advice on voluntary deregistration seems very clear cut (although having read numerous articles and forums I now know VAT is an absolute mine field!!!) however, despite planning to remove 2 staff and closing 1-2 days a week from February, our accountant says HMRC are extremely unlikely to approve our deregistration request until 4 consecutive VAT returns show cumulative reported sales below the threshold....
His recommendation is that we submit our Q4 VAT in March (which will show 12mth sales modestly in excess of the threshold) and that we draw HMRC's attention to the fact our latest two quarters sales were lower and will remain such over the next 12mths due to a restructure/downsizing.
This contradicts your advice but it is his experience that the majority of deregistration requests get declined until the 12mths cumulative sales fall within the threshold (which is absolutely mad!!). Has HMRC's approach changed in the 2yrs since your article was published??
Thanks