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HMRC internal manual

VAT Small and Medium Enterprises Assurance Manual

HM Revenue & Customs
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Post audit action: deregistration action

Traders who cease to make taxable supplies are no longer liable to be registered and should be deregistered. The instructions of V1-28 Registration Section 13 should be followed.

However, a trader who is still making taxable supplies, and who is no longer liable to be registered, because the turnover falls below the prescribed limits for cancellation, cannot be compulsorily deregistered, but should be invited to apply for cancellation of registration.

Requests for deregistration due to disaggregation of business should be opposed, and action taken in accordance with V1-28, Section 13.

Traders who receive only small repayments of tax in every accounting period may consider that the repayments do not justify the work involved in keeping VAT records and submitting returns. If they are eligible to apply for exemption under V1-28 Chapter 6, Table 11 they should be encouraged to do so.

Divisional registration, voluntary registration and registration of persons as intending traders can only be cancelled under the appropriate directions of V1-28 Registration. The deregistration procedures are set out in V1 28 Section 13.