VATAFRS0225 - Operation of the scheme: Deregistration of farmers joining the scheme

It is a condition of entry to the scheme that, if a farmer is registered for VAT, the registration must be cancelled. Therefore, any application from a VAT registered trader to join the flat rate scheme must also be treated as a request for deregistration; but if a farmer also undertakes non-farming activities (for example bed and breakfast) special consideration is needed before the registration is cancelled. This is explained in VATAFRS0800.

• If you are satisfied that the registration may be cancelled, follow the guidance in VATAFRS1900.
• If you are not satisfied that the registration may be cancelled, refuse the application to join the scheme, following the guidance in VATAFRS1700.

Important note: Under The VAT Act 1994 Schedule 4 Paragraph 8(3) farmers who deregister from VAT to join the flat rate scheme are not required to account for VAT on any stocks and assets they have on hand when the registration is cancelled.