Deregistering for VAT
How it works and whether you should do it
If your taxable turnover is falling, you can ask HMRC to cancel your VAT registration once you expect turnover in the next 12 months to stay below the deregistration threshold of £88,000.
How it works
The application is made online, and HMRC confirms a deregistration date. You file a final VAT return, and you may have to account for VAT on stock and assets you keep if the VAT on them exceeds £1,000 in total.
Should you?
Deregistering saves admin and makes your goods and services cheaper to consumers, but you lose the right to reclaim VAT on your costs. For businesses selling mainly to VAT-registered customers, staying registered is often better even below the threshold. We check the numbers and explain how this applies to your business before you decide.
💡 Good to know: Deregistering and re-registering repeatedly attracts HMRC attention. Treat it as a settled decision, not a tap to turn on and off.
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