Knowing when and how to cancel VAT registration is important once your business circumstances change. You must cancel your VAT registration if you are no longer eligible to be registered under UK VAT rules. In some cases, cancellation is mandatory. In others, it is optional.
You must notify HMRC within 30 days if you stop being eligible. If you fail to do so, penalties may apply.
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When You Must Cancel VAT Registration
You are legally required to cancel VAT registration if:
- You stop trading completely.
- You stop making VAT-taxable supplies.
- You join a VAT group and no longer need a separate registration.
The cancellation request must be submitted within 30 days from the date your eligibility ended.
When You Can Cancel VAT Registration Voluntarily
You may apply to cancel VAT registration if your taxable turnover falls below £88,000 (the deregistration threshold).
However, this option does not apply if:
- You and your business are based outside the UK, and
- You supply goods or services to the UK (or expect to within the next 30 days).
In those cases, the deregistration threshold does not apply in the same way, and different rules govern eligibility.
If You Have an EORI Number
If you cancel VAT registration, HMRC will automatically cancel your Economic Operators Registration and Identification (EORI) number at the same time.
You must apply separately for a new EORI number if it is still required for customs purposes.
When You Do Not Need to Cancel
You do not need to cancel VAT registration if:
- You are changing your legal structure but keeping the same VAT registration number (you must transfer the registration instead).
- A company within a VAT group closes but the group continues (you must amend the VAT group using form VAT50-51).
- You are joining or forming a VAT group (specific VAT50-51 forms must be completed).
In these situations, registration is amended rather than cancelled.
How to Cancel VAT Registration Online
You can cancel VAT registration online if:
- You have stopped trading and are not part of a VAT group.
- Your taxable turnover is below £88,000.
- You have stopped making taxable supplies.
- You are applying for exemption because most or all of your supplies are zero-rated.
You will need your Government Gateway login details to complete the online process.
When You Must Cancel by Post
You must cancel by post using form VAT7 if:
- Your legal status has changed and you require a new VAT registration number.
- You sell your business and the new owner will not keep your VAT number.
- Your VAT group is closing (you must submit VAT7 together with VAT50-51 forms).
- Your business stopped trading after liquidation.
The VAT7 form must be completed in full before printing and submitting to HMRC.
What Happens After You Cancel
HMRC normally confirms cancellation within about three weeks.
The official cancellation date will be either:
- The date you stopped trading or ceased taxable activity, or
- The date you requested cancellation (for voluntary deregistration).
HMRC will confirm this through your VAT online account or by post.
From the effective cancellation date:
- You must stop charging VAT.
- You must retain VAT records for six years.
If HMRC later determines that you should not have cancelled, they may re-register you and require payment of VAT due for the intervening period.
VAT Obligations After Cancellation
You must submit a final VAT Return covering the period up to and including the cancellation date.
You must also account for VAT on stock and business assets held at that date if both conditions apply:
- You reclaimed, or could have reclaimed, VAT when you purchased them.
- The total VAT due on those assets exceeds £1,000.
Your final VAT Return must be submitted by the deadline provided by HMRC. You do not need to wait until all invoices are received. If additional invoices arrive later, you may still reclaim VAT where permitted.