Selling a Business: Cancelling your VAT Registration


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When a business owner sells or transfers their business as a going concern they generally have to cancel their VAT registration.

Sellers must notify HM Revenue & Customs (HMRC) in writing within 30 days of selling a business.

HMRC considers that a seller has transferred their business as a going concern for VAT purposes if: they retire and another person takes over the business assets or they sell the business and its assets, or sell part of their business that is capable of being operated separately.

In some situations a buyer can apply to keep the vendor’s VAT registration number. If the seller agrees then they need not cancel their VAT registration.

Instead, both the vendor and new owner of the business should complete form VAT 68 and send it to HMRC. If the buyer receives authorisation to retain the VAT number, the seller must pass on any records so the buyer can comply with their VAT responsibilities.

Even if the buyer has not taken over any business assets, they may still have taken over the business for the purposes of VAT registration. For instance, if a buyer rents premise from an owner of a restaurant and they continue to run the restaurant, they will be liable to register for VAT based on the previous owner’s VAT taxable turnover.