On 7 December 2016, the First-tier Tribunal2 ruled that HMRC was correct to refuse to agree to a request for retrospective VAT de-registration. The appellant taxpayer had applied for voluntary VAT registration, seemingly relying on advice from its advisors at the time that it would not be required to account for VAT until such time as it reached the turnover threshold for compulsory registration. Some years later the appellant, through its new advisors, applied for deregistration “with immediate effect”. Almost a year later, the appellant requested that the deregistration be backdated to the date of original registration. HMRC refused the retrospective de-registration request, relying on the language of paragraph 13 of Schedule 1 to the VATA 1994.

The Tribunal agreed with HMRC that the clear language of paragraph 13 meant that de-registration could take effect, at the latest, from the day the request is made. Retrospective de-registration could only be granted if the taxpayer had not been liable or entitled to register at the time of registration. It was accepted that, on the facts, the appellant had been entitled to register. Although the judge expressed sympathy with the appellant (which had relied on incorrect professional advice) he had no discretion in the matter.

The decision can be viewed here.