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Registering and Unregistering for VAT - Fleximize

Registering and Unregistering for VAT

Find out all you need to know about registering for VAT, including handy tools for easy bookkeeping

By The Fleximize Team

How do I register my business for VAT?

If you're required to register your business for VAT based on your annual turnover, or you would like to register voluntarily, there are a few steps you’ll need to take.

First, you'll need to gather the relevant information. This includes:

Most businesses are eligible to register their business online, but those who can't will need to submit their registration by post using a VAT1 form. If you're registering a partnership for VAT, you must also submit a VA2 form to provide details of all the partners involved.

It’s worth registering online promptly, as most businesses are required to submit quarterly VAT returns via their online account. Alternatively, you can appoint an agent to register and submit VAT returns to HMRC on your behalf.

A registration certificate should be issued to your VAT online account or by post within 30 working days (complex cases can take up to six months). This confirms your VAT number and your ‘effective date of registration' – this is either when you crossed the turnover threshold for compulsory registration, or when you requested voluntary registration. You'll also be informed about when you need to submit your first VAT return and payment.

Until you receive your certificate, you won’t be able to show VAT on invoices. You will, however, have to pay the VAT during this waiting period. To allow for this, you should adjust your prices and keep careful accounts for the interim. Once you have your VAT number you can reissue any invoices including the updated VAT.

How do I deregister for VAT?

You need to cancel your VAT registration if you're no longer eligible to be VAT registered. For example, you should deregister if you cease trading or producing goods that are VAT taxable, or you join a VAT group.

It’s possible to cancel your VAT registration by sending a VAT 7 form to HMRC through the post, but it's often quicker and easier to cancel online. Once you’ve logged on to the HMRC website, click through to the ‘Services you can use’ page. Select ‘Change registration details', and then ‘Activate or access online services.’ Once you click ‘Request VAT Deregistration’, you will need to choose the reason why you're cancelling from the list of options provided. If the reason you’re deregistering isn’t listed, you must write to HMRC explaining your situation.

The process can take up to three months and HMRC will automatically display the earliest date by which you can be deregistered. If you’re in need of rapid deregistration, then applying on the last day of the month can result in HMRC proposing the first day of the following month, i.e. the next day, as a deregistration date. Otherwise, it may take a week or more before a verdict is posted in the customer communications section.

What are the best tools for VAT record keeping?

Keeping accurate and up-to-date VAT records is an essential part of running a successful business.

If you're using your online account, you may want to use accounting software that lets you submit your VAT return directly, rather than having to enter your figures manually into HMRC's online service. There are many different programs to choose from, so it's important to find the one that's right for your business. A list of suggested software programs can be found on the gov.uk website.

Under the new Making Tax Digital scheme, all businesses over the turnover threshold for compulsory registration must keep digital records and submit digital VAT returns using compatible software, rather than using the online service. This requirement will be extended to include businesses below the turnover threshold in April 2022, so it's important to get your business prepared sooner rather than later. You can find out which software packages are compatible with Making Tax Digital here.