In this section:
If you close or sell your business, you need to tell HM Revenue & Customs (HMRC) 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:
If you close your business because you cease trading, you must tell HMRC in writing and cancel your VAT registration. You need to do this within 30 calendar 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 HMRC about changes in your business circumstances
For VAT purposes, HMRC considers that you have transferred your business as a going concern if:
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 the business can apply to keep your VAT registration number. If you agree to this, then you don't need to cancel your registration. Both you and the new owner of the business should complete form VAT 68 and send it to:
VAT Registration Service
HM Revenue & Customs
Imperial House
77 Victoria Street
Grimsby
DN31 1DB
Go to form VAT 68 - Request for transfer of a registration number
If you transfer your VAT registration number to the new owner of the business you should cancel any Direct Debit that you have set up to pay your online VAT Returns. The new owner of the business can set up a new Direct Debit through the VAT online service.
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, you'll have to charge VAT in the normal way.
These special rules 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 but have been sold as a whole package.
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
After you sell your business, you must retain your VAT records.
If the buyer keeps your VAT number, you must pass your records to them. Permission can be sought from HMRC for you to keep your records, but you will still have to make the information available to the buyer so that they can comply with their own VAT responsibilities.
