Question about deregistering for VAT

[dollybird66]

I am planning on closing my contractor limited company in the next six months as my final contract is coming to an end mid-June and then I have the prospect of a secure permanent job.

I am in discussion with my accountants re wrapping up the company, however, I do the VAT myself so would need to deregister the company for VAT myself and I have looked on the HMRC website in regards to how to deregister for VAT and am a little confused.

Firstly, I am using the flat rate scheme.

I believe I have to fill in form VAT 7. However, it says it has to be done within 30 days of the company ceasing trading. I will be issuing my final invoice for services at the end of June (which will be paid end of July), so would I need to submit form VAT 7 at the end of June or when I am actually paid for June (i.e. July)? I will also need to pay a final VAT quarter that will be due for payment in September.

Obviously it will take several months to pay things like corporation tax, end the payroll run and I will be paying my accountant until the business is actually closed. However I will not be getting any money into the company.

I suppose the real question is, what is counted as "trading" when closing down a business and what payments can be made in the period between paying off any tax, accountantants etc and actually finalising the closing down of the business with companies house?

If anyone can advise, I would really appreciate it. My accountants are being helpful but I think I have already asked them too many questions.

[spidersong]

If the final invoice for the contract is the last invoice you'll be issuing then you'll officially have ceased making taxable supplies once you've issued the invoice. You can do the VAT 7 then (or you could actually inform them now if you know the date), and you'll then get a final VAT return for the period from the end of your last return up to the last day of trading.

If you incur VAT in relation to the business after this point then you can make a separate claim for that using form VAT427 which is a claim for input tax after deregistration and normally includes things like final accounts etc plus any bills that weren't 'tidied up' on the final return, you can actually do more than one of these but it's probably best to try to get it all done in one go.

Basically for service industires the last day of trading can be fairly fluid though, even though it says that you must notify within 30 days penalties are very, very, very unlikely unless you've somehow worked a late deregistration into a fraud or something like that, and it's up to you to say when the last day of trading is, you could keep going for a while after the last invoice if you're still dealing with company business and receiving invoices/enquiries, or if you've got any support work outstanding or have any guarentees/retentions that may need covering. but as I say above if you deregister from the last invoice date it won't stop you recovering any of the VAT that you're entitled to recover.