De-register for VAT

May 21, 2005 3 Replies
S

My business has stopped making taxable supplies (has stopped making supplies full stop). Is it in my interest to de-regster for VAT. The LTD company is still active as we have to honour contracts and warranties for the periods they were agreed for, and we may have to issue some credit notes, as well as receive some credit notes from suppliers.



If I de-register then when I receive credit notes from suppliers, do I have to re-pay the VAT on that - they were bought obviously when we were registered, but if not, then I could de-register and avoid having a VAT bill until the LTD company is shut down.



We're only talking a few grand on the possible future credit notes received.


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T

"sks" wrote

At my last VAT inspection visit, the nice lady inspector pointed out to me that HMC&E (as they then were) would *force* de-registration if I no longer made any taxable supplies. Even if I continued making exempt supplies. She said that, although they would *not* force de-registration if a business just fell below the de-registration limit, they *would* force de-registration if taxable supplies fell to zero....

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C

Which I suppose if fair enough, after all if you are VAT registered they would have to process a nil return each quarter (assuming quarterly accounting) which knowing how much other services allegedly cost for HMR&C to provide is probably horredusly costly and a massive waste of taxpayers money.

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"Chris" wrote

Perhaps - but wouldn't it be even more costly to keep on registering & de-registering every other quarter, as you happened to make a taxable supply or not??

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