Transferring a VAT registration

The taxable turnover threshold that determines whether businesses should be registered for VAT is currently £85,000. The taxable turnover threshold that determines whether businesses can apply for deregistration is £83,000. The thresholds are currently frozen until 31 March 2026.

When there is a change of business ownership or legal status it is possible to transfer a VAT registration so that the new business will keep the same VAT number.

Businesses can apply for a VAT registration transfer online or by post. It usually takes three weeks for HMRC to confirm the transfer.

HMRC’s guidance states the following:

If you are selling your business:

  • cancel your accountant’s access to your VAT online account – for example if you authorised them to deal with your VAT;
  • cancel any direct debits on your VAT online account, and
  • you must also give your records to the buyer if you are passing on your VAT number.

If you are buying a business:

  • contact HMRC within 21 days of the transfer application if you want to keep the seller’s accountant,
  • replace any self-billing arrangements with new ones, and
  • set up new direct debits on your VAT online account.

Businesses may wish to start afresh and can opt to get a new VAT number. This will mean cancelling the existing VAT registration and re-registering for VAT. Whilst this requires additional paperwork it may be preferable as the VAT registration starts with a clean slate.

Source:HM Revenue & Customs| 31-07-2023

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Haroon Muhammad

Haroon Muhammad boasts 17 years of comprehensive experience in tax, financial services, and local government. His sheer love for tax drives his mission to save clients money and optimise their financial strategies. Haroon is dedicated to navigating complex financial landscapes with precision and delivering exceptional results for his clients.