You are required to cancel your VAT registration if you are no longer making taxable supplies or if you join a VAT group. This is a legal requirement and you will be charged a penalty if you fail to cancel your registration within 30 days of the trigger event.

You can also cancel on a voluntary basis if your VAT taxable turnover drops below the deregistration threshold, currently £83,000.

The application to deregister can be processed online or you can complete a VAT7 form and submit by post. 

It usually takes three weeks for HMRC to confirm your deregistration and the official deregistration date. This is either the date when the reason for your cancellation took effect (for example, when you stopped trading), or the date you asked to deregister if it’s voluntary.

You will need to keep on charging VAT up to the confirmed deregistration date, but you must not charge VAT after this date.

Source: New feed