Turnover dropped, you're closing the business, or you've merged with another entity — here's the actual process, deadlines, and what you'll owe on the way out.
Last updated: June 2026
You can apply to deregister if any of the following apply:
Voluntary deregistration: your expected taxable turnover for the next 12 months is below £88,000 (note this is lower than the £90,000 registration threshold — a deliberate buffer to stop businesses bouncing in and out of VAT registration around a single number).
You stop trading or making taxable supplies entirely.
You join a VAT group or transfer the business as a going concern to another VAT-registered entity.
You were only ever eligible for a specific reason that no longer applies (for example, you registered only to reclaim VAT on a one-off large purchase and have no ongoing taxable activity).
Work out your expected taxable turnover for the coming 12 months. If it's genuinely likely to stay below £88,000, or you're stopping trading, you're eligible to apply.
Most businesses cancel their registration online through their VAT online account (or ask an agent/accountant to do it on their behalf). You'll need your VAT registration number and the reason for deregistering.
You can usually request a specific date, subject to HMRC agreement — for example, the last day of your current VAT period, to keep your paperwork clean.
If the total value of business assets (stock, equipment, etc.) you still hold at deregistration exceeds £1,000 (excluding VAT), you generally must account for output VAT on their value as if you'd sold them — since you reclaimed input VAT on them originally and are now leaving the system holding them tax-free.
You must submit one final VAT return covering the period up to your deregistration date, including the deemed output VAT on retained stock and assets described above.
From your effective deregistration date, you must stop charging VAT on sales, since you're no longer authorised to do so. Continuing to charge VAT after deregistration is not permitted, and any VAT you did charge after that date would still be owed to HMRC even though you can't legally keep charging it going forward. Update your invoice templates and any e-commerce platform VAT settings immediately once your deregistration is confirmed.
Yes — deregistering isn't permanent. If your turnover picks back up and crosses £90,000 again, or you simply want to re-register voluntarily, you go through the normal registration process again, and you'll typically be issued a new VAT registration number (your old one isn't automatically reactivated).
HMRC sets the deregistration threshold slightly below the registration threshold deliberately, to prevent businesses hovering right at £90,000 from repeatedly registering and deregistering as turnover fluctuates month to month.
No, deregistration is optional in this scenario — you can choose to remain VAT-registered even if your turnover has fallen, which some businesses do if they still benefit from reclaiming input VAT or dealing mainly with VAT-registered customers.
If the total value of stock and assets you still hold is £1,000 or less (excluding VAT), you generally don't need to account for output VAT on it — this is a de minimis threshold specifically to avoid small, immaterial amounts creating paperwork.
HMRC typically processes online deregistration applications within a few weeks, and will confirm your effective deregistration date in writing (or via your online account).
If your final VAT return shows you've overpaid (more input VAT reclaimed than output VAT owed, including any deemed VAT on retained assets), HMRC will refund the difference in the normal way, the same as any other VAT return.
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