VATDREG08350 | Cancellation in particular cases: intending traders: cancellation at the request of, or with the agreement of, the trader

A person may register voluntarily if they intend to make supplies under the following provisions:
• Schedule 1, paragraph 9 and 10
• Schedule 9ZA paragraph 41 and 51
• Schedule 9ZC paragraph 9

These persons are referred to as ‘intending traders’. This allows the recovery of input tax in preparation for making future taxable supplies.

If the person’s intention to make taxable supplies changes, they may request deregistration, or HMRC may cancel their registration. Deregistration may take effect from the date the intention ceased or from a later date as agreed.

If deregistered, the person may be required to repay all or part of the input tax previously claimed – see VATREG22300. Additionally, there may be a deemed supply of stock, assets or land and property held at the effective date of cancellation – see section 7 of the VAT Notice 700/11.

You should be aware of the risks associated with cancelling the registration of an intending trader - see VATREG21900. In particular, you should be satisfied that the person had a genuine intention to make taxable supplies, and the activities were consistent with that intention – see VATREG21150.

Normally, there is no transfer of going concern if an intending trader sells their business before they have made any taxable supplies. This is because the person has not yet started trading and doesn’t meet the conditions for TOGC treatment – see VAT Notice 700/11.