A VAT 7 form is the form a business uses to cancel its VAT registration with HMRC. Businesses submit it when they stop trading, when turnover falls below the deregistration threshold, or when they no longer make taxable supplies. HMRC reviews the form and confirms the official deregistration date once processing completes.
This guide explains when a business must file a VAT 7, how to submit it, and what happens to VAT obligations afterwards.
When Do I Need to Submit a VAT 7 Form?
Deregistration is compulsory in some situations and optional in others. The difference matters, because compulsory cases carry a 30-day deadline.
Compulsory Deregistration
- The business stops trading entirely: HMRC must be told within 30 days of stopping.
- The business no longer makes taxable supplies: for example, it moves entirely into exempt activities. The same 30-day deadline applies.
- The legal entity changes: such as a sole trader incorporating as a limited company. The old registration must close, although the new company can often keep the same VAT number by applying to transfer it on form VAT68.
- Two VAT-registered entities merge: one registration is usually cancelled as part of the merger.
Missing the 30-day compulsory deadline can result in a penalty from HMRC, so timing the submission matters as much as filing it correctly.
Voluntary Deregistration
- Turnover expected to stay below £88,000: the current VAT deregistration threshold. A business can apply to deregister even while it continues trading.
How Do I Submit a VAT 7 Form?
Submission happens online through the VAT online account or by post on the paper VAT 7 form.
Online Through the VAT Online Account
Most businesses submit deregistration through their VAT online account on GOV.UK. The online process is faster and gives immediate confirmation that HMRC received the request.
By Post Using the Paper VAT 7 Form
Businesses without online access can download and post the paper VAT 7 form. HMRC processes postal submissions more slowly, typically adding several weeks compared to the online route.
Either way, the business needs its VAT registration number and a clear reason for deregistration before submitting.
What Information Does the Form Require?
The VAT 7 form asks for specific details rather than a general explanation. HMRC needs:
- The VAT registration number
- The reason for deregistration, selected from HMRC’s defined categories
- The date trading stopped, if applicable
- Expected taxable turnover for the next 12 months, for voluntary applications
- The value of any stock or assets still held, since VAT may be due on these at deregistration
Incomplete forms delay processing, so gathering this information before starting the submission speeds up the outcome.
How Long Does Deregistration Take?
HMRC typically confirms deregistration within three weeks of receiving a complete VAT 7 form. The confirmation letter states the official deregistration date, which is not always the date of submission. HMRC sometimes backdates the effective date to when trading actually stopped.
Until confirmation arrives, the business must continue charging and accounting for VAT as normal.
What Happens After VAT Deregistration?
Several obligations change immediately once HMRC confirms the deregistration date.
- VAT charging stops: the business can no longer charge VAT on sales from the confirmed date.
- A final VAT return becomes due: this covers the period up to deregistration and must still be filed and paid on time.
- VAT on retained assets may apply: output VAT is due on stock and assets still held at deregistration, where VAT was reclaimed on them, if the total VAT due would be more than £1,000.
- Records must be kept for six years: deregistration does not remove the duty to keep VAT records.
- Input VAT recovery ends: VAT on future purchases can no longer be reclaimed.
A business that later needs to re-register, for example after turnover rises again, restarts the registration process and usually receives a new VAT number.
Can I Deregister Voluntarily If I’m Below the Threshold?
Yes, voluntary deregistration is available when taxable turnover for the next 12 months is expected to stay below £88,000. Many small businesses choose this route to reduce administration and to stop adding VAT to prices for customers who cannot reclaim it.
HMRC reviews voluntary applications individually. A business must show that turnover will remain below the threshold going forward, not only that it fell below it temporarily.
Deregistering also has a cost: the business loses the ability to reclaim VAT on its own purchases. A scheme such as the Flat Rate Scheme sometimes reduces the burden without giving up registration. Our VAT return services in Slough compare projected turnover and scheme options before a business applies, which avoids an unnecessary re-registration later.
What If I Deregister by Mistake?
A business that deregisters in error should contact HMRC as soon as the mistake is identified. Depending on the circumstances, HMRC may restore the original registration or require a new application. Any gap where the business traded without a valid VAT number can lead to backdated VAT and adjustments, so acting quickly limits the complications.
Frequently Asked Questions
Is there a fee to submit a VAT 7 form? No. Deregistering for VAT through a VAT 7 form is free, whether submitted online or by post.
Can I deregister for VAT with outstanding returns? Outstanding returns and any VAT owed still have to be dealt with, and unresolved returns can delay the deregistration. Filing everything due before applying keeps the process straightforward.
Does deregistering cancel my EORI number? No. An EORI number, used for importing and exporting goods, is separate from VAT registration and is not automatically cancelled by a VAT 7 form.
Can a deregistered business still reclaim VAT on old invoices? In limited cases, yes. VAT on costs relating to the period of registration, such as an invoice received late or accountancy fees for the final return, can be claimed on form VAT427.