VATDREG08400 | Cancellation in particular cases: insolvency, death or other incapacity

Guidance on death, insolvency, and incapacity can be found at VATREG42000

The insolvency regime includes business rescue procedures such as Administration and Voluntary Arrangement, where the expectation is that the business will continue trading in the medium to longer term.

In contrast, during bankruptcy or liquidation, the business typically ceases trading upon the appointment of the insolvency practitioner (IP). However, the IP will generally continue to make taxable supplies through the sale of stocks and assets.

Important: Regardless of the type of insolvency, VAT registration must not be cancelled unless the business has ceased all taxable activities, including both trading and the realisation of stock or shares.

If the business ceases as part of the insolvency process, the appointed insolvency practitioner or Official Receiver is responsible for submitting the application to cancel the VAT registration, where appropriate. They are also accountable for VAT on any supplies made after their appointment.