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Article Index
A Guide to VAT for Start-up Businesses
How VAT Works
Should You Register?
Charging Customers VAT
VAT Returns
VAT Invoices
VAT Accounting Schemes

A Guide to VAT for Start-up Businesses

When can I de-register from VAT?

If your business’ VAT taxable turnover for the year is less than or equal to £81,000, or if you expect it to fall to £81,000 or less in the next 12 months, you can cancel your VAT registration.

De-registration involves completion of a final VAT return and you must inform HMRC and explain why your turnover has fallen – it could be simple business difficulty, or you may have reduced your staff numbers or changed contract hours.

If you sell or liquidate your business, you will also need to contact HMRC to de-register.

A Guide to VAT for Start-up Businesses

When do VAT exemptions and relief apply?

There are different VAT regulations for companies who decide to:

  • Buy, sell, let, sub-let or develop property.
  • Agree a special discount or rebate with a customer or supplier that is documented.
  • Manually or outside the normal business accounting system.
  • Enter into a reciprocal arrangement with another business.

Other areas where special VAT rules apply include imports and exports, company cars, buying or selling a business, bad debts, free gifts and business promotions, and supplies to employees for either company or personal use.

The HMRC offers a full list and guide of VAT exemptions and relief here.

Labels: Tax