If you are a vat registered trader in the UK that desires to surrender your vat certificate for a number of reasons then you need to know all about the vat deregistration process to cancel your vat number. Although the procedure for canceling vat registration is pretty simple, you will still have to account for vat and file your final vat return.
There are several reasons that may compel you to leave the vat system. You can apply for deregistration of vat if your business has collapsed and you’ve declared insolvency, your taxable sales have dropped dramatically therefore you expect them to drop below the vat threshold limit of ?70,000 within the next 1 year, you sell your organization, there is a alternation in the legal status of the business, you can either join another vat group or disband your existing vat group, or you want to join the agricultural flat rate vat scheme. There are various other reasons that 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 generally or even wholly zero rated. You can also do so in case your input tax usually exceeds your output tax. However, out of all above circumstances you will have to provide required proof as well as convince hmrc vat regarding the genuineness of the reason as to the reasons you want to cancel your vat registration. Once you are deregistered from vat then you will not be permitted to issue vat invoices or file vat returns.
In order for you to deregister yourself from vat registration number you will have to get hold of your vat agent that will guide you about the exact process to be followed in order that you don’t find yourself making errors. You will need to fill 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 within this range. This form will require your vat registration number, business name and address, and will need you to tick the appropriate reason as to the reasons you have applied for deregistration in addition to offering the required anticipated sales figures. Additionally, you will have to mention the gross value including vat of stocks and assets which you currently hold. You will also have to specify in the event you follow the vat cash accounting system.
After you have filled up the vat deregistration form then hmrc will often reply in a time period of 3 weeks. In the event you do not receive a reply then you should remind them. If hmrc is content with your application then you will get a formal notice of vat cancellation on VAT35 form and also get a formal notice of exemption from registration on VAT8 form. Your vat agent will now be able to direct 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 have been in order and if there aren’t any mistakes in your deregistration form then you ought to be out from the vat system within a month of filing vat deregistration.