u/Not_Drewwy

So I accidentally registered for VAT despite being under the threshold, and am now facing a £4,000 assessment. Any advice?

I've been dealing with this for 3 months, and I'm really stressed about my VAT situation because it just keeps getting worse.

Last year I registered as a sole trader. I mistakenly registered for VAT even though my turnover was nowhere near the VAT registration threshold. I didn't do enough research myself, which was a huge mistake on my part. I had thought that VAT was an essential step in becoming a freelance sole trader.

For context, I work in Film & TV as an AD and Runner, also as a fashion and commercial model and part-time as a camera technician, all on a freelance basis. I only realised that I had signed up for VAT when I received the letter about my overdue VAT returns, stating that I owe around £900. I never charged VAT to any clients because I didn't realise I was supposed to.

Upon receiving the letter, I immediately called HMRC to see if they are willing to help me fix my issue and withdraw those returns but they only told me to deregister. So I hired a chartered accountant to help me sort this out, we drafted a letter to HMRC to request a cancellation and deregistration of VAT; for HMRC to withdraw my overdue VAT returns and remove any outstanding penalties fees.

After nearly two months of waiting, HMRC replied to my letter, but did not answer my request, only referring me on how to cancel my registration and dodged the request for the VAT returns and penalty fines. At the same time, HMRC had sent me numerous letters reminding me of the outstanding payments and also the moving the matter to BPO Debt Collection, which had mailed me and called me, I said to them that I'm disputing this claim.

So I decided to talk to my accountant and submit the figures for my VAT returns in order to deregister. However, my accountant came back to me with a figure of around £4,000, for basically a whole year of VAT returns, since July 2025.

I froze and realised that everything I had saved up for the past few years would potentially all be used towards fixing this one mistake. And to be frank, I simply cannot afford this.

In a moment of panic, I requested to cancel my registration through my online Tax portal. I was under the impression that I cannot cancel my registration without submitting the returns, yet it was approved and my VAT registration was cancelled today.

This however, did not wipe away the debt I owe and the potential £4,000 that I have to pay, I guess it just stopped it from progressing it any further.

I called HMRC again to beg them to see if there's any way I can mitigate or reduce the amount I have to pay, but they basically only said, 'Rules are rules, it was not just a wrong press of the button, and you consented to knowing the consequences by registering voluntarily.'

Is there any way I can appeal these VAT returns? tbh the penalties aren't that bad what is really killing me are those overdue VAT returns, if I go ahead and charge my clients the VAT only invoice, not only is it very likely to be ignored, it would also damage my relationships with them, and that would virtually be career suicide.

Any advice or has anyone gone through something similar?

So I accidentally registered for VAT despite being under the threshold, and am now facing a few thousand pounds assessment. Any advice?

I've been dealing with this for 3 months, and I'm really stressed about my VAT situation because it just keeps getting worse.

Last year I registered as a sole trader. I mistakenly registered for VAT even though my turnover was nowhere near the VAT registration threshold. I didn't do enough research myself, which was a huge mistake on my part. I had thought that VAT was an essential step in becoming a freelance sole trader.

For context, I work in Film & TV as an AD and Runner, also as a fashion and commercial model and part-time as a camera technician, all on a freelance basis. I only realised that I had signed up for VAT when I received the letter about my overdue VAT returns, stating that I owe around £900. I never charged VAT to any clients because I didn't realise I was supposed to.

Upon receiving the letter, I immediately called HMRC to see if they are willing to help me fix my issue and withdraw those returns but they only told me to deregister. So I hired a chartered accountant to help me sort this out, we drafted a letter to HMRC to request a cancellation and deregistration of VAT; for HMRC to withdraw my overdue VAT returns and remove any outstanding penalties fees.

After nearly two months of waiting, HMRC replied to my letter, but did not answer my request, only referring me on how to cancel my registration and dodged the request for the VAT returns and penalty fines. At the same time, HMRC had sent me numerous letters reminding me of the outstanding payments and also the moving the matter to BPO Debt Collection, which had mailed me and called me, I said to them that I'm disputing this claim.

So I decided to talk to my accountant and submit the figures for my VAT returns in order to deregister. However, my accountant came back to me with a figure of around a few thousand pounds, for basically a whole year of VAT returns, since July 2025.

I froze and realised that everything I had saved up for the past few years would potentially all be used towards fixing this one mistake. And to be frank, I simply cannot afford this.

In a moment of panic, I requested to cancel my registration through my online Tax portal. I was under the impression that I cannot cancel my registration without submitting the returns, yet it was approved and my VAT registration was cancelled today.

This however, did not wipe away the debt I owe and the potential few thousand that I have to pay, I guess it just stopped it from progressing it any further.

I called HMRC again to beg them to see if there's any way I can mitigate or reduce the amount I have to pay, but they basically only said, 'Rules are rules, it was not just a wrong press of the button, and you consented to knowing the consequences by registering voluntarily.'

Is there any way I can appeal these VAT returns? tbh the penalties aren't that bad what is really killing me are those overdue VAT returns, if I go ahead and charge my clients the VAT only invoice, not only is it very likely to be ignored, it would also damage my relationships with them, and that would virtually be career suicide.

Any advice or has anyone gone through something similar?