A compulsory VAT deregistration is usually required where a VAT registered business:

• Stops making taxable supplies
• Sells a business
• Changes legal status
• Disbands a VAT group
• Joins a VAT group
• Joins the agricultural flat rate scheme

In some circumstances it may be possible to keep the existing VAT registration number. A voluntary deregistration can be made by businesses that do not expect taxable their turnover to exceed the deregistration limit.

The current deregistration limit is £83,000. HMRC may ask for some evidence as to why the business thinks their turnover will fall below the £83,000 threshold. A VAT deregistration cannot be undertaken retrospectively.

A business that deregisters can make late claims for input tax on services received whilst it was VAT registered (subject to the usual VAT time limits).

Source: New feed