Andrew Needham looks at the advantages and potential pitfalls of de-registering for VAT.
A business can de-register for VAT if its turnover falls below the de-registration threshold, which is currently £83,000 per annum.
If the taxable turnover in the previous 12 months is below this limit the business can de-register for VAT; but it can also de-register if it can persuade HMRC that its taxable turnover in the next 12 months will be below the deregistration limit. Businesses can now de-register using HMRC’s online system.
When to de-register for VAT
If a business wants to deregister, my advice is that it does so promptly. Deregistration will only be backdated if a business has ceased to be entitled to registration because (say) it has sold its business. If a business is deregistering voluntarily because its sales are below the
