VATDREG13000 - Deferment of compulsory deregistration
HMRC can agree with the person to
defer the effective date of cancellation to a date after it ceased to be liable
or entitled to be registered if it is considered necessary for:
• Disposal of capital assets for which tax invoices may need to be issued.
• Recovery of input tax on invoices received after trading ceased, but which
relate to the business’s taxable activities prior to deregistration.
Common examples include:
• Accountants’ or solicitors’ services, where invoicing may be delayed.
• Services performed after cessation but attributable to the period of trading.
A six-month deferment is generally
sufficient to cover normal commercial inputs. If this period is not adequate,
the trader may submit a VAT 427 claim to recover VAT on services received after
the EDC provided they relate to the business carried on before deregistration.
See VAT Input Tax - VIT32000
for more details.
Note: The partial exemption de
minimis limits do not apply to VAT incurred after deregistration.
During the deferment period a
person is still registered and as such must:
• Submit VAT returns as normal.
• Account for VAT on any taxable supplies made during this time