If you’re a vat registered trader in the UK that wants to surrender your vat certificate for a variety of reasons then you need to know everything about the vat deregistration process to cancel your vat number. Even though the procedure for canceling vat registration is quite simple, you still have to account for vat and file a final vat return.
There are several reasons that may compel you to leave the vat system. It is possible to apply for deregistration of vat in case your business has collapsed and you’ve declared insolvency, your taxable sales have dropped dramatically and you expect them to drop below the vat threshold limit of ?70,000 within the next 1 year, 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 else you intend to join the agricultural flat rate vat scheme. There are several other reasons which are specified by HM Revenue and Customs or hmrc vat department that could allow you to be a legitimate candidate for vat deregistration.
You may also voluntarily leave the vat tax system if your taxable supplies are mainly or even wholly zero rated. You can also do this if your input tax usually exceeds your output tax. However, out of all above circumstances you will have to provide required proof in addition to convince hmrc vat regarding the genuineness of the reason as to why you wish to cancel your vat registration. Once you’re deregistered from vat then you’ll no longer be permitted to issue vat invoices or file vat returns.
In order for you to deregister yourself from vatvalidation you will need to get hold of your vat agent that will guide you about the exact process that must be followed in order that you don’t find yourself making errors. You will need to fill up the VAT 7 vat form once 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 need your vat registration number, business name and address, and will require you to tick the right reason as to why you’ve applied for deregistration in addition to providing the required anticipated sales figures. Additionally, you will need to mention the gross value including vat of stocks and assets that you currently hold. You will also have to specify if you follow the vat cash accounting system.
After you have filled up the vat deregistration form then hmrc will usually reply within a time period of 3 weeks. In case you do not get 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 be able to guide you on matters regarding reclaiming vat after deregistration and claiming relief on bad debts after deregistration.
If certain situations compel you to make an application for cancellation of your vat certificate then you’ll have to follow proper procedure as laid down by hmrc vat department. If all your papers are in order and when there aren’t any mistakes in your deregistration form then you ought to be out of the vat system in a month of filing vat deregistration.