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Claim VAT back after you deregister



Sadly Steve Allen died in July 2011. His wife Leah would like to thank all those who know Steve and helped contribute to his success. She has recommends Steve's clients and anyone who is interested in this article topic to contact Rob McCann from “The Vat people” on (tel) 0161 477 6600 . Please make reference to Steve Allen.

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There can be many reasons why a business deregisters e.g. sale of the business, retirement, insolvency, making a company dormant, ceasing to make taxable supplies, or falling below the VAT deregistration limit. Once you have deregistered for VAT, most people think that you can no longer reclaim any VAT. However, there are circumstances in which you can still get some VAT back from HMRC.

You may use Form VAT 427 (VAT 426 if your business is insolvent) to claim input tax on goods or services supplied to you for business purposes while you were registered, that you didn't claim on either your normal returns or on your final return. For example, it may be that you hadn't received the necessary evidence (e.g. a VAT invoice) to make the claim by the time your final VAT return was due. Subject to the 3-year limit (4-year from 1.4.10) for reclaiming VAT, you will still be able to claim a repayment of VAT, using Form VAT 427, once you receive the invoices. The VAT 426/427 can be obtained from the National Advice Service or downloaded from HMRC’s website (

You can also use Form VAT 427 to make a claim for input tax where you made an error while registered, and didn't make a claim at the right time despite holding the proper evidence. You must provide invoices confirming that the goods or services were purchased before deregistration. You should make the claim, which is also subject to the 3-year limit (4-year from 1.4.10), as soon as possible after cancelling your registration. However, bear in mind that any payment due to you could be delayed if your business bank account has been closed.

In addition, you can also claim the VAT back on services that you receive after deregistration, provided they relate to your business activities while you were VAT registered. For example, your business deregisters on 1 March 2004 because turnover has fallen below the deregistration, and you send its final VAT return in by 31 May 2004. Your accounting year finished 28 February, and your accountant completed your accounts and sent you the bill in September 2004. You can still claim the VAT back because it relates to the time when you were registered for VAT. These claims are also subject to the 3-year cap (4-year from 1.4.10), starting from the date of the invoice that is sent to you.

If your business is partly exempt, the normal ‘de minimis limits’ do not apply, and any VAT relating to an exempt supply cannot be reclaimed. With regard to non-attributable input VAT, the recoverable proportion applicable immediately prior to deregistration should be used.

If your business is registered as a VAT group, and a member leaves the group registration and does not register in its own right, the representative member may recover VAT incurred by the departed company after the date it leaves.

Where a business is transferred as a going concern (‘TOGC’) and the VAT registration number is to be retained by the purchaser of the business by a VAT68 application, the transferor is entitled to submit a claim for deregistration expenses. The claim is to be submitted in the usual manner on Form VAT 427.

HMRC will need original documentation (i.e. invoices, supporting evidence etc) to be sent with the VAT 427 claim form.

There is a centralised team in Liverpool where all completed forms and original documentation should be submitted:

VAT 427 Team ETBD 3SE Queens Dock Liverpool L74 4AA

Once HMRC has agreed your claim, the original invoices will be stamped and returned to you.

About the Author

STEVE ALLEN is the Managing Director of VAT Advisers Ltd, and has more than 19 years’ experience in VAT. Beginning with HM Customs & Excise in 1990, Steve spent 8 years in the Department in a variety of roles such as VAT Insolvency and VAT investigation in Liverpool, and latterly as a VAT Inspector at Wigan VAT Office.

Steve left the Department in 1998 to become a consultant with Latham Crossley and Davies, before joining Ernst & Young. In 2001, Steve formed VAT Solutions (UK) Ltd with a co-Director, and built up a successful practice over 8 years before setting up VAT Advisers Ltd in September 2009.

Steve advises accountants and individual businesses on all aspects of VAT, but in particular, issues concerned with land and property, charities, cross-border trading, and arrears of VAT.

VAT Advisers Ltd,
1 Dundonald Avenue
Stockton Heath
(t) 01925 212244
(f) 01925 212255
(m) 07810 433927

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Article Published/Sorted/Amended on Scopulus 2009-12-10 01:20:03 in Tax Articles

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