Insolvency VAT Deregistration HMRC Update

HMRC has published insolvency practitioner bulletin 1 (2025) to communicate an update on the VAT 7 form.

The update clarifies how IPs should complete the VAT 7 form that is submitted to HMRC to cancel a UK VAT registration number.

A new section has been introduced to the VAT 7 form to include bank details. This is to reflect HMRC’s changes to how it issues VAT repayments to IPs, which came into effect on 10 March 2025.

HMRC advise selecting the ‘The business has gone into liquidation’ option when at the ‘Why are you applying to cancel your registration?’ question. Completing the VAT 7 form in this way should trigger the relevant questions for insolvency cases.

IPs should ensure they follow HMRC’s instructions to minimise the risk of VAT repayment delays.

Our VAT insolvency specialist Tony Cochrane will soon provide some useful insights for IPs and case workers on when they should contemplate VAT deregistration, and share practical points to consider before submitting the VAT 7 form to HMRC.

Since 2013 Tony has provided VAT support to IPs and caseworkers at Big 4 and mid-tier firms, as well as external clients. He has a strong understanding of insolvency procedures, and proactively adds value through identifying risks & opportunities. He has helped IPs resolve complex VAT issues and has led HMRC communications. Tony presented the 2024 ICAS Insolvency & Restructuring Conference VAT session.