VAT deregistration and re-registering

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Monsoon
Monsoon Registered Posts: 4,071 Beyond epic contributor 🧙‍♂️
in General accounting discussion
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?

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  • Newbie
    Newbie Registered Posts: 229 Dedicated contributor 🦉
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    This would appear to be the case by my understanding but cannot find anything concrete to confirm this yet
  • De6
    De6 Registered Posts: 9 New contributor 🐸
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    Please also remember the turnover is counted on a rolling year and not just the turnover at the end of the trading year
  • deanshepherd
    deanshepherd Registered Posts: 1,809 Beyond epic contributor 🧙‍♂️
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    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
    Monsoon Registered Posts: 4,071 Beyond epic contributor 🧙‍♂️
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    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
    deanshepherd Registered Posts: 1,809 Beyond epic contributor 🧙‍♂️
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    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.
    T.C. Registered, Tutor Posts: 1,448 Beyond epic contributor 🧙‍♂️
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    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
    Monsoon Registered Posts: 4,071 Beyond epic contributor 🧙‍♂️
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    Ah thanks Dean, that's great :D

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