VATDREG08400 - Cancellation in particular cases: insolvency, death or other incapacity

See VATREG42000 for guidance on the effects of death, insolvency and incapacity on registration.

The insolvency regime includes business rescue procedures such as Administration and Voluntary Arrangement where we expect businesses to continue to trade in the medium to longer term.

In bankruptcy and liquidation on the other hand, the business will usually cease trading on the appointment of the insolvency practitioner (IP). However, the IP will usually continue to make taxable supplies through the sale of stocks and assets.

Regardless of the type of insolvency involved, the VAT registration must not be cancelled unless the business has ceased making all taxable supplies, including both trading and stock/asset realisation.

Where the business ceases as part of the insolvency process, the person in charge of the insolvency (IP or Official Receiver) will be responsible for submitting the application to cancel the registration as appropriate. The person in charge of the insolvency is responsible for accounting for VAT in relation to post appointment supplies.