In this section:
- Changes to your business circumstances and your VAT registration
- Cancelling your VAT registration
- Closing or selling your business and VAT registration
- What to do about VAT registration if your business becomes insolvent
- Reclaiming VAT after you deregister
Closing or selling your business and VAT registration
If you close or sell your business, you need to tell us in writing, and cancel your VAT registration. You need to do this within 30 days. This guide outlines the steps you need to take.
If you sell your business as a going concern or transfer it to another legal entity, then in some circumstances the new owner may apply for your registration number to be reallocated to them. This guide explains how to do this.
On this page:
Closing your business
If you close your business because you cease trading, you must tell us in writing and cancel your VAT registration. You need to do this within calendar 30 days of closing your business if you want to avoid having to pay a fine.
Get information about how to cancel your VAT registration
Find out how and when to tell us about changes in your business circumstances
Selling your business
For VAT purposes, we consider that you have transferred your business as a going concern for VAT purposes if:
- you retire and want another person to take over the assets of your business
- you sell your business and its assets to someone else
- you sell to someone else part of your business that is capable of being operated separately
When you transfer your business as a going concern, you normally have to cancel your VAT registration.
However, in some situations, the new owner of your business can apply to keep your VAT registration number. If you agree to this, then you don't need to cancel your registration. Instead, both you and the new owner of your business should complete form VAT 68 and send it to HM Revenue & Customs (HMRC).
Obtain form VAT 68 Request for transfer of a registration number
Treatment of the sale for VAT purposes
Normally, when you sell something, the sale is treated as a supply for VAT purposes. However, when you sell your business, in certain circumstances special rules apply and the sale will not be treated as a supply for VAT purposes, so no VAT should be charged. In other circumstances, however, you'll have to charge VAT in the normal way.
These special rules, among other things, help businesses by improving their cash flow. They also avoid the need to separately value assets that may be liable at different rates, or are exempt, and that have been sold as a whole.
Read our guide to transferring a going concern
More about the special rules when selling a business in VAT Notice 700/9
More about how land and property are treated in VAT Notice 742
More about opting to tax land and buildings in VAT Notice 742A
Obtain form VAT1614 Option to tax land and property
Keeping records
After you sell your business, you must retain your VAT records.
If your buyer gets permission to keep your VAT number, you must pass your records to them. You can obtain permission from us to keep your records, but you still have to make the information available to your buyer so they can comply with their VAT duties.
