VAT deregistration and re-registering

Monsoon

If someone deregisters from VAT because their turnover is well under the dereg threshold, they have to declare that their turnover will be under the dereg limit for the next 12 months.

After that 12 months passes, are they subject to the same registration criteria as anyone else, i.e. turnover over the reg limit?

Newbie

This would appear to be the case by my understanding but cannot find anything concrete to confirm this yet

De6

Please also remember the turnover is counted on a rolling year and not just the turnover at the end of the trading year

deanshepherd

They are subject to the same criteria immediately, not after 12 months. If 2 months later they exceed the limit then they have to register.

Monsoon

Sorry, I possibly wasn't clear. I'm trying to find out how long they have to stay under the dereg limit for, e.g. Is it for 12 months after they voluntarily dereg? At some point they must go back to being subject to the same registration limit as everyone else (not the lower dereg threshold) and I'm trying to find out when that is.

deanshepherd

They don't.

They need only satisfy HMRC that they expect to be under the lower threshold for the next 12 months. Once HMRC have approved the cancellation then they are back to the normal thresholds straight away.

Of course HMRC may take a dim view if they very quickly go over the threshold again but there is not a lot they can do about it unless they can prove (or even wish to investigate) whether the request to cancel was fraudulent.

T.C.

That's good to know, because I have a client who has just done the same, ie de-registered because he was not very busy and then re-registered just 8 months' later.

Monsoon

Ah thanks Dean, that's great