Flow chart - VAT deregistration

You may be required to deregister for VAT or circumstances may allow you to do so. It can be favourable to remain registered or the opposite can be true. Either way it is important to understand what your options are in order to maximise VAT savings and avoid HMRC penalties.

Flow chart

The Flow Chart - VAT Deregistration will help you determine if you can or must deregister.

Definitions for the flow chart:

• Taxable supplies - any supplies of goods or services which are not exempt from VAT or outside the scope of VAT. Information about what counts as exempt can be found at https://www.gov.uk/guidance/vat-exemption-and-partial-exemption and https://www.gov.uk/vat-businesses/when-not-to-charge-vat for supplies which are outside the scope of VAT. HMRC’s VAT guide Notice 700 is at https://www.gov.uk/guidance/vat-guide-notice-700

Where an overseas supplier provides any services to a UK VAT-registered customer and the place of supply of those services is the UK, the UK customer must account for VAT under the reverse charge procedure. The value of the supplies must be added to other taxable supplies to determine if registration or deregistration is required or possible.

• Distance sales - when a taxable person in the Northern Ireland (NI) state supplies and delivers goods to a customer in an EU member state (other than through an online marketplace where it accounts for the VAT) and the customer is not registered for VAT or liable to be registered for VAT
• Relevant acquisitions – if you are in NI any goods (not services) you buy from a VAT-registered supplier in an EU member state to bring to the UK are relevant acquisitions.