How to de-register for VAT - read our step by step guide

Deregistering from VAT is an option if your business has registered for VAT but your turnover falls under the de-registration threshold of £88,000.

Why de-register for VAT?

You must register for VAT with HMRC if your business’ VAT taxable turnover is more than £90,000 (2026/27 tax year).

If your VAT taxable turnover falls below the de-registration threshold of £88,000, your business can ask HMRC to cancel its VAT registration voluntarily.

In some circumstances, deregistration is mandatory. For example, you must cancel your VAT registration if your business stops trading, ceases making VAT-taxable supplies, or is no longer eligible to be VAT registered. You may also need to deregisters if your company joins a VAT group. This, according to HMRC, allows: “Two or more corporate bodies to account for VAT under a single registration number with one of the corporate bodies in the group acting as the representative member.”

When must you de-register for VAT?

You must cancel within 30 days if you are no longer eligible to be VAT registered.
If you do not notify HMRC within the required 30-day period, you may be liable for penalties and could be required to account for VAT that should have been declared after the date your registration should have been cancelled.

How to cancel your VAT registration

Most businesses can apply to cancel their VAT registration through their online VAT account which you can access using your Government Gateway credentials.

During the process, you will be asked the reason for deregistration and the date from which you want your registration cancelled.

If you are unable to use the online service, HMRC may allow you to apply using form VAT7 or another alternative method. Before submitting a paper application, check the latest HMRC guidance to confirm the options available.

What happens after I cancel my VAT registration?

HMRC will confirm your deregistration and the official deregistration date. This will usually be the date you stopped trading or became ineligible for VAT registration, or the date you requested deregistration if your application was voluntary.

You must be logged in to use this checklist

HMRC will send confirmation to your VAT online account or through the post if you didn’t deregister online.

From your de-registration, you must stop charging VAT, but retain your VAT records for six years, because HMRC may ask for them.

HMRC will automatically re-register your business if it believes you shouldn’t have cancelled. And you’ll have to pay any VAT you should have paid.

You’ll need to submit a final VAT Return for the period up to and including the de-registration date.

You must account for any stock and other assets you have on the de-registration date if: you could reclaim VAT when you bought them; the total VAT due on these assets is over £1,000.

According to HMRC: "Don’t wait until you’ve received all your invoices before submitting your final return. You’ll still be able to reclaim VAT on anything you bought for your business while still registered once you get the invoices."

What if I want to transfer VAT registration?

In some circumstances, a VAT registration can be transferred from one business owner to another. This commonly happens when a business is sold as a going concern and the new owner wishes to retain the existing VAT registration number.

Applications can usually be made through your online VAT account. HMRC also provides form VAT68 for certain transfer requests and circumstances where an alternative application method is needed.

Both the buyer and seller must notify HMRC and provide details of the transfer. If the transfer is approved, the buyer takes over responsibility for the VAT registration from the agreed date.

The seller should cancel any existing VAT Direct Debit arrangements linked to the registration, and the buyer should set up new payment instructions where appropriate.

HMRC will confirm the transfer date and whether the existing VAT registration number can continue to be used by the new owner.

End of Article

What are you looking for?

When and how to de-register for VAT

Jump to:

Why de-register for VAT?

When must you de-register for VAT?

How to cancel your VAT registration

What happens after I cancel my VAT registration?

You must be logged in to use this checklist

What if I want to transfer VAT registration?

How do I get funding for an existing business?

How do I review my VAT Return before filing?

Find an Accountant or Bookkeeper

Register with Informi today:

Already a member?

Want to become a member?

What are you looking for?

When and how to de-register for VAT

Jump to:

Why de-register for VAT?

Tax doesn't need to be taxing

When must you de-register for VAT?

How to cancel your VAT registration

What happens after I cancel my VAT registration?

You must be logged in to use this checklist

What if I want to transfer VAT registration?

Share this content

Recommended reading

How do I get funding for an existing business?

How do I review my VAT Return before filing?

Find an Accountant or Bookkeeper

Register with Informi today: