What’s Changed
As of 13 June 2025, businesses that de-register for VAT have new flexibility:
- Under the Value Added Tax (Amendment) Regulations 2025, the VAT Commissioners can now extend the period allowed for submitting a final VAT return, even if the original deadline has already passed. (gov.uk)
- The rule applies to any person who ceases to be VAT registered on or after 14 June 2025. (legislation.gov.uk)
Why It Matters
Prior to this change, businesses that missed the deadline for their final return—even due to HMRC delays—faced penalties and interest with no regulatory option to seek an extension. This amendment makes the policy officially available in law. (gov.uk)
Practical Implications for Businesses
| Situation | Prior Position | New Position from 14 June 2025 Onwards |
|---|---|---|
| De-registering from VAT | Must submit final return within 1 month (plus 1 week if electronic); no statutory extension allowed. (gov.uk) | Business may be granted extra time by HMRC—even after deadline—via formal direction. |
| Missed deadline due to external HMRC delays | No recourse; penalties and interest would apply. | HMRC empowered to extend deadline; penalties likely avoided if extension granted in line with new power. |
Steps Businesses Should Take
- Review the timing of your VAT de-registration. If you ceased being VAT liable or expect to do so on or after 14 June 2025, this change could benefit you.
- If you anticipate delays in submitting your final return, or if HMRC has provided late notice, write to HMRC explaining the reasons, citing the new provision.
- Monitor HMRC’s response closely—extensions must be granted “by direction”—so document all communications and request confirmation in writing.
- If you already missed a final return deadline after 14 June 2025, explore whether an extension under these new regulations might yet be secure.
Example Scenario
- Company A de-registers for VAT on 15 June 2025. Their final return would normally be due by 15 July (plus 1 week if electronic).
- Because of supply chain issues, they don’t receive key documents until a week after the deadline. Under new rules, HMRC can agree to extend the deadline past the original date—and after return due date—if “by direction” they consider the delay reasonable.
- If agreed, no penalties; if not, penalties may apply but Company A has a stronger case under the amended Regulations.
Key Things to Keep in Mind
- This change only affects final VAT returns upon de-registration—it does not extend deadlines for regular VAT returns or payments.
- “Direction” must come from HMRC Commissioners—extension is not automatic.
- Be proactive—if delays are anticipated, request extension before penalties accrue.
Bottom line: this amendment makes HMRC’s good administrative practices statutory. Businesses can now more safely plan for VAT deregistration deadlines without fear of unfair penalties caused by external delays.