The Guide to VAT at [broken link removed]
says :-
[START]Cancellation of registration
12.11 A person who has opted to register for VAT may, subject to conditions which may include the repayment of any excess of VAT deductions over payments, cancel his or her registration by arrangement with the local inspector of taxes. Similarly, a person whose turnover has fallen below the appropriate turnover threshold may have the registration cancelled. A person ceasing to trade should notify the inspector of taxes of this fact in order that the VAT registration number may be cancelled promptly.
This is important to note, otherwise return forms and demands for estimated VAT liability will continue to issue automatically.
Revenue will also cancel a person’s VAT registration if he or she has been registered in error, or he or she has ceased to be a taxable person. In circumstances where a person elects to register for VAT, a cancellation of registration may give rise to recovery by Revenue of all or some of the net VAT repaid to the person during the period of election. [END]
This suggests that once a trader has at least paid to Revenue more than they claimed, one can, if under the thrheshold, cancel with no further implications. However I may be open to correction on this where motor vehicles are involved. If , for example you claim VAT on a vehicle and, while still registered sell it then VAT would be due on the sale proceeds. I'd suggest getting your accountant to check into it more before any action is taken.