Know all about the vat deregistration process to cancel your vat number

If you are a vat registered trader in the UK that wants to surrender your vat certificate for a number of reasons then you need to know all about the vat deregistration process to cancel your vat number. Although the process of canceling vat registration is quite simple, you will still need to account for vat and file a final vat return.

There are several reasons that could compel you to come out of the vat system. You can apply for deregistration of vat if your business has collapsed and you have filed for insolvency, your taxable sales have dropped dramatically and you expect them to drop below the vat threshold limit of £70,000 in the next 12 months, you sell your business, there is a change in the legal status of your business, you either join another vat group or disband your present vat group, or you intend to join the agricultural flat rate vat scheme. There are several other reasons that are specified by HM Revenue and Customs or hmrc vat department that can make you a valid candidate for vat deregistration.

You can also voluntarily step out of the vat tax system if your taxable supplies are mainly or even wholly zero rated. You can even do so if your input tax usually exceeds your output tax. However, in all the above circumstances you will need to provide required proof as well as convince hmrc vat as to the genuineness of the reason as to why you want to cancel your vat registration. Once you are deregistered from vat then you will no longer be allowed to issue vat invoices or file vat returns.

In order for you to deregister yourself from VAT you will need to contact your vat agent that will guide you on the exact process to be followed so that you do not end up making errors. You will need to fill up the VAT 7 vat form after you have read and understood vat notice 700/11 on “Canceling your registration” along with notice 700/1 among other notices in this range. This form will require your vat registration number, business name and address, and will require you to tick the appropriate reason as to why you have applied for deregistration along with providing the required anticipated sales figures. You will also have to mention the gross value including vat of stocks and assets that you currently hold. You will also need to specify if you follow the vat cash accounting system.

Once you have filled up the vat deregistration form then hmrc will usually reply within a period of 3 weeks. In case you do not receive a reply then you should remind them. If hmrc is satisfied with your application then you will receive a formal notice of vat cancellation on VAT35 form and also receive a formal notice of exemption from registration on VAT8 form. Your vat agent will now be able to guide you on matters regarding reclaiming vat after deregistration and claiming relief on bad debts after deregistration.

If certain circumstances compel you to apply for cancellation of your vat certificate then you will need to follow proper procedure as laid down by hmrc vat department. If all your papers are in order and if there are no mistakes in your deregistration form then you should be out of the vat system within a month of filing for vat deregistration.