If you are presently registered for VAT but your turnover has dropped below £83,000 you could deregister for VAT. However, you do not have to deregister.
Disadvantages and advantages of deregistration
- If you buy significant amounts of goods and services that include a VAT charge, then if you deregister you will not be able to recover any VAT charged.
- If most of your sales are zero-rated or most of your customers are registered for VAT and can recover the VAT you charge, deregistering means you will lose any recovery of input VAT on purchases and your customers will gain no advantage.
- If, however, you sell to the general public who cannot reclaim the VAT you charge, and if the VAT on your purchases is not significant, then deregistering could provide an opportunity to reduce your prices and regain a competitive advantage.
The process of deregistration is quite straightforward, but it is worth considering any knock-on effects before taking this option. Please call as we can help you crunch the necessary numbers.
- Companies House fees expected to rise to fund new powers - September 21, 2023
- Retirees set for second bumper State Pension hike as pay inflation soars - September 19, 2023
- Clampdown on hidden online fees to help shoppers cut costs - September 14, 2023
- One in five strips back pension contributions or halts them altogether - September 12, 2023
- Trying to track down a pension? Help is at hand - September 7, 2023
- Tax Diary September/October 2023 - September 5, 2023
- Class 2 and 4 NIC for the self-employed - September 5, 2023
- Overview of private pension contributions - September 5, 2023