So you registered for VAT – maybe because you hit that £90,000 threshold, or perhaps you registered voluntarily to claim back VAT on allowable expenses. But now your circumstances have changed, and you’re wondering: can I actually deregister?
The short answer is yes, you can! But there are some conditions you’ll need to meet first. Let’s walk through how it works.
When you can deregister for VAT
There are two main situations where you might be eligible to cancel your VAT registration:
1. Your expected taxable turnover has dropped
If you expect your taxable turnover for the next 12 months to drop below £88,000, you may be able to deregister for VAT. Notice that’s £88,000, not the original £90,000 threshold – there’s a buffer built in to avoid people constantly registering and deregistering.
💡 Taxable turnover is the total value of everything you sell, minus anything that is VAT exempt or out of scope.
2. You voluntarily registered and want to cancel
If you registered for VAT while you were still under the earnings threshold (because you wanted to claim back VAT on allowable expenses, for example), and you’ve now decided that being VAT registered isn’t working for you anymore, you can apply to cancel your registration.
How to deregister for VAT
The process is fairly straightforward. You can cancel your VAT registration online through the gov.uk website.
However, if you’re not eligible for online cancellation, you’ll need to cancel your VAT account via post instead. The government website contains resources around which method applies to you.
What happens after you deregister
Once your VAT registration is cancelled, HMRC will send you confirmation that you’re officially deregistered. But you’re not quite done yet – there are a few things you’ll need to sort out:
1. Submit a final VAT return
You’ll need to file one last VAT return covering the period up until your deregistration date. This wraps up all your VAT activity and makes sure everything’s square with HMRC.
2. Pay any outstanding VAT
If you owe HMRC any VAT from your final return, you’ll need to pay it. Make sure you’ve got the funds set aside to cover this!
3. Keep your VAT records
Even though you’re no longer VAT registered, you’ll need to keep all your VAT records for an additional six years. HMRC can still request to see them if needed, so don’t bin them just yet.
💡 More VAT questions? We’ve got answers! Check out our complete guide to VAT for sole traders.
Hnry sorts your admin
Whether you’re registering, deregistering, or somewhere in between, Hnry can handle all the admin for you.
We’ll manage your VAT obligations while you’re registered – calculating, collecting, and filing everything automatically. And if you need to deregister, we’ll handle that process too, including your final VAT return.
You focus on the fun stuff (like the actual job), and we’ll make sure all the paperwork is sorted. Simple as that!
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