VATDREG06000 | Failure to notify that taxable activity has ceased

HMRC may cancel the VAT registration of a person who has ceased making taxable supplies provided we notify them of our decision and provide the reason and effective date of cancellation.

Penalties
A registered person who fails to notify HMRC within 30 days of ceasing to make supplies may be liable for a penalty under Section 69 of the VAT Act 1994. For more information, refer to the VAT Civil Penalties guidance manual: VCP11100 - Breach of VAT Regulatory Provisions.

Before proceeding with cancellation if the trader:
• Still has goods on hand, and
• Intends to sell them, and satisfies you of this intention,
then they are still entitled to be registered, and deregistration should not proceed.

Fixed or Capital Assets
Where fixed or capital assets remain, deferment of compulsory deregistration may be appropriate. See further guidance at VATDREG13000.