If a company is profit making then they will invariably be paying money over to the government. So if not in a reclaim position each quarter then there isnt any point in being VAT registered unless from a perception viewpoint.
Will also be important who your customers are. If you customers are the general public then they wont be able to reclaim the VAT you charge so all you are doing by being VAT registered is making your prices 20% more expensive than nonVAT registered competitors.
Details of what you need to do to deregiter are on HMRC website.
They normally de-register is they are consistently below the threshold. Due to economic times there are alot out there who are under but still doing Vat quarters. If they have Assets/stocks left after de-registration then these will need to be accounted for and added back into the VAT return in boxes 1 and 6.
What is the nature of the business?
I have one who was going to de-register but decided against it as hes now gone into the commercial sector and they like their subbies to be Vat reg.
Is this something that is allowed - provided that the client is below the VAT registration threshold?
To prevent firms applying to cancel the Registration every time the turnover dips £1 below the threshold, there is also a De-Registration threshold, currently £75,000. I recall sometimes having to wait for a couple of quarters to prove the turnover was consistently below.
Just complete VAT 7, notify HMRC within 30 days of intention to deregister then will be a final VAT return to do and will need to account for VAT on assets and stock if the value is more than £6k (£1k worth of VAT).
