In this section:
- Changes to your business details and your VAT registration
- How to sign up to use VAT online services
- Change VAT registration details online on the HMRC website
- Cancelling your VAT registration
- Closing or selling your business and VAT registration
- Reclaiming VAT after you cancel your registration
- Insolvency and your VAT registration
Insolvency and your VAT registration
You must notify HM Revenue & Customs (HMRC) if you, your business partner or your business becomes insolvent.
HMRC will calculate the VAT that you owe based on the amount outstanding at the date on which the business became insolvent. VAT will be claimed up to the day before HMRC establishes their claim in the insolvency. The claim may also include penalties and interest for late or missed payments.
When you stop trading because of insolvency, you must cancel your VAT registration. Once your registration is cancelled, a final return will be issued covering the period from the first day after the end of the last accounting period, up to the day before the date of de-registration.
This guide explains what VAT HMRC will claim and what VAT returns you have to make.
On this page:
VAT registration and insolvency
If your business goes bankrupt
If your business goes bankrupt then your affairs will be taken over by a court-appointed representative and they will be responsible for dealing with HMRC. They'll notify HMRC of your insolvency.
Certain procedures are not treated as insolvencies. These procedures are:
- agricultural charge receivership
- fixed charge receivership
- Law of Property Act receivership
- court appointed receivership
In these cases, your VAT affairs will continue to be dealt with by your local VAT office.
Read guidance for insolvency practitioners in VAT Notice 700/56
What VAT will HMRC claim?
HMRC will calculate the VAT that you owe based on the amount outstanding at the date on which the business became insolvent. VAT will be claimed up to the day before HMRC establishes their claim in the insolvency.
The claim may also include penalties and interest for late or missed payments. However, at present, default surcharge, civil penalties and default interest are not applied to post-insolvency VAT returns except in the case of:
- administration orders
- partnership administration orders
- deceased persons' administration orders
- deeds and schemes of arrangement
- Scottish trust deeds
- county court administration orders
- voluntary arrangements
The person appointed to take over the affairs of a bankrupt business is responsible for paying VAT from the date HMRC establishes their claim.
Read guidance for insolvency practitioners in VAT Notice 700/56
The VAT returns that you need to make
You're responsible for submitting the pre-insolvency returns for your business. However, if you haven't submitted a return for any pre-insolvency period, then the person appointed to handle your affairs will do this. Neither they nor you should sign the return - instead, they must write 'completed from the books and records of the company/trader' on it.
Read guidance for insolvency practitioners in VAT Notice 700/56
