VATDREG04100 - Eligibility or requirement to deregister: schedule 1 - taxable supplies
A person must notify HMRC within 30 days if they cease to make, or no longer intend to make, taxable supplies. If HMRC is satisfied that the person is no longer registerable, it may cancel their VAT registration with effect from the date they ceased making taxable supplies or a later date agreed with the person (see paragraph 13(2) of Schedule 1, VAT Act 1994).
The term registerable is defined in paragraph 18 as a person who is neither liable nor entitled to be registered. This means HMRC can only compulsorily deregister a person who:
• No longer makes taxable supplies,
• No longer intends to make taxable supplies, or
• Makes only supplies within the meaning of paragraph 10(2)
Voluntary Deregistration
HMRC must cancel a person’s registration upon request if it is satisfied that:
• The person is not, and has never been, liable to register for VAT (i.e. they registered voluntarily), or
• They continue to make taxable supplies but can demonstrate that the value of those supplies in the next 12 months will fall below the deregistration threshold
The value of supplies does not need to be below the threshold at the time of application. However, the person must provide credible evidence and justification for the anticipated drop in turnover. This includes behavioural trends, business forecasts, and any relevant documentation. Hindsight cannot be used to support retrospective deregistration.
You must also consider the reason for the expected reduction in turnover—see VAT Notice 700/11. The current deregistration threshold can be found here Cancel your VAT registration.
Paragraph 10(2) supplies
A person making only supplies described in paragraph 10(2) may deregister at any time, regardless of the value of those supplies.
These include:
• Supplies made outside the UK that would be taxable if made in the UK, and
• Supplies specified in the VAT (Input Tax) (Specified Supplies) Order 1999 (SI 1999/3121)