by Jay Redman | Jul 19, 2021 | European VAT
TITLE: How To Check if a Company is VAT Registered: 5 Best Ways
When you start up your company or work with a supplier/partner, you may forget to check if your VAT number is valid. It is against the law for a firm to operate (run a business) in the United Kingdom if its VAT taxable revenue exceeds specific criteria (£85,000 for VAT registration). According to UK law, companies are required to be registered with Her Majesty’s Revenue and Customs (HMRC) if they earn above £85,000 in turnover.
However, determining whether or not a business’s counterpart is registered for VAT might be challenging. Don’t worry, this article will show how to check if your VAT number or that of a supplier is valid.
It’s a straightforward process that requires little time and effort. This will ensure that you and your company are not liable for any tax fraud and money laundering.
There are two ways to verify the validity of a value-added tax registration number (VRN) of your company. This is especially useful when dealing with a new customer or supplier, who may require this as evidence for other tax purposes.
To verify if a VAT number is valid, you may phone HMRC on the VAT helpline or use the European Commissions’ digital platform called the VAT Information Exchange System (VIES).
In this article, we will take a closer look at these options and how you can use these options in order to check if your business has a legitimate VAT number from HMRC.
How to Check if Your Company is VAT Registered: What is a VAT Number?
A VAT number is made up of 15 alphanumeric characters, the first two of which represent the country in which the company is registered. Currently, all nations in the European Union (EU) use two-letter country codes.
Businesses should first check if a UK VAT number is valid by seeing if it is 9 digits long (excluding the country code (GB) at the beginning). The first seven digits are random numbers, while the last two are determined using a formula based on the first seven.
1) Making a Call to HMRC VAT Helpline
Businesses can call the HM Revenue and Customs (HMRC) value-added tax (VAT) Helpline on 0300-200-3700 to verify if a VAT registration number is genuine or not. It is advisable to make this call anytime between 8 am and 8 pm throughout the week.
However, there are several drawbacks to this approach. For starters, HMRC can only verify VAT numbers for businesses registered in the U.K. Additionally, the VAT Helpline’s short timeframe or opening hours can be a barrier for UK firms.
There may be times when a company needs to inquire about its VAT number outside of helpline hours, or when it takes time to speak or build up a dialogue with a member of staff.
2) Check using the UK Gov Website
If you are a business or an entrepreneur that wants to check if his business has been registered, all you need to do is check the UK VAT number on this website.
You may use this service to check if a UK VAT number is valid. You may equally use this service to verify the name and address of a business from the issued VAT.
If you are a business operating in the UK, you may use this service to prove when you check a VAT number for a business in the UK.
Not only is the service equally available in Welsh, but it also is fairly straightforward and a foolproof way to ensure your business has its VAT number registered with HMRC.
3) Make use of the Digital Platform from the European Union – VAT Information Exchange System (VIES)
Businesses in the UK can use the digital platform, which is an online VAT number validation service provided by the value-added tax (VAT) Information Exchange System, instead of calling the HMRC VAT hotline (VIES).
The European Commission’s VIES platform assists businesses in verifying the legitimacy of a VAT registration number for any firm in the EU. The VIES portal in the UK employs real-time data feeds from all member states’ VAT systems, ensuring that the information given is always up to date.
When a company visits the VIES website, they can choose from a drop-down menu (member-state & VAT number and requester member state & VAT number).
The company will input information relevant to the country in which it operates, as well as the VAT registration number that must be validated. The site will then inform the firm whether or not the number is legitimate and has been registered with the competent authority.
4) Speak to your Accountant or Agent
You may equally speak to your accountant or agent if you want to verify your VAT number. For entrepreneurs that use accounting or bookkeeping services, they may be able to check that their company is VAT registered with relevant employees of the organization.
For a majority of firms, the accountant can provide all the details related to the payment of VAT.
Frequently Asked Questions
What is VAT Fraud?
Tax avoidance includes VAT fraud. It occurs when a company fails to charge VAT when it is due, or when a company charges VAT but fails to pay it to HMRC. They could request that you pay in cash to avoid paying VAT on a transaction or job, or that you make multiple payments to different people or firms.
Should I use the EU VAT Information Exchange System (VIES) if I am in the UK?
If you are doing due diligence and checking your VAT number, using the UK Gov website is much simpler. However, if you are a European Business, you are better off using the VAT Information Exchange System (VIES) from the European Union.
How is Northern Ireland Treated after Brexit in terms of VAT?
by Jay Redman | Jul 16, 2021 | European VAT
What is a VAT Registration number?
When a firm registers for VAT, HMRC assigns it a VAT number, which is a unique identifier. VAT numbers in the U.K are nine digits long and always begin with the letter GB.
If you’re working with a provider from another EU country, the VAT number will be in a different format, with a different country code. On its website, HMRC provides a list of ID formats from European Union member states.
Why is a VAT number important?
If you try to reclaim VAT without having a valid VAT number from your supplier, HMRC may reject your claim. If this happens, you may be stuck footing the bill or dealing with a lot of paperwork to fix the problem!
If you pay VAT to a supplier but the invoice doesn’t include a registration number, you should contact them right away since you’ll need a legitimate VAT invoice from them to reclaim any VAT they’ve charged you.
VAT Number Checker: Where can I find it?
When you’re looking for the VAT number of another business, your first port of call should be any invoice it has sent to you. If the company is VAT registered, its unique ID should appear on all of its invoices.
Check if a VAT number is valid.
If you’re dealing with a new customer or supplier and want to see if the VAT registration number (VRN) they provided is legitimate, you have three options.
1) Calling the HMRC VAT Helpline
HMRC maintains a comprehensive database of VAT-registered firms, so if you have any questions regarding your registration number, call their VAT helpline at 0300 200 3700.
This option, however, has two disadvantages. The first disadvantage is that HMRC can only examine the VAT number for businesses that are registered in the United Kingdom.
Secondly, the VAT Helpline’s limited hours of operation are equally a source of concern.
Given that you may need to check a VAT number outside of the hotline’s operating hours, and that even when the helpline is open, getting through to a member of staff can take time, this may not be the ideal option.
2) Checking the VIES Website
The VAT Information Exchange System (VIES) of the European Union can be used to verify the authenticity of both UK and EU VAT numbers. You can check if a supplier’s VAT number is legitimate by entering the registration numbers and applicable country codes into the fields given.
If VIES indicates that the supplier’s VAT registration is invalid, you should contact them as quickly as possible to obtain the correct VAT number. The second method is to use the VAT Information Exchange System’s online VAT number validation service (VIES).
Simply go to this page of the European Commission’s website to access the VIES for validating a VAT number.
Choose the nation where the firm is located from the drop-down menu, and then input the VAT registration number you want to check from the drop-down option. The site will then tell you if the number is ‘Valid’ or ‘Invalid.’
Some nations will additionally offer you the name and address of the firm associated with the VAT number if it is a genuine VAT registration number, depending on the local data protection requirements.
3) Check a UK VAT Number via HMRC
Use the HMRC service to check your VAT number or that of a partner or supplier. You may also use this system to check if a UK VAT number is valid as well as if the name and address of a business are registered to.
Not only is HMRC’s platform straightforward, but it is also equally time-saving. This service is limited to UK VAT numbers only but is equally available in Welsh (Cymraeg).
4). You can equally use services such as VAT-Search, but these are quite limited as not very many businesses are registered on such platforms. For example, VAT-SearchUK only has 600 affiliated businesses.
Frequently Asked Questions
What do I need to do when my details change?
You can change your VAT details in several ways:
- You can use your VAT online account
- You may use the VAT 484 form if you want to change your details via post
- You could equally use webchat or phone
by Jay Redman | Jul 13, 2021 | European VAT
TITLE: VAT Threshold UK: What Happens if You Go Above VAT Threshold?
If you’re an e-commerce, tech, or financial service company or operate in any other sector, demand for your goods or services can suddenly increase. For example, demand for gifts tends to rise during holiday periods such as Mother’s and Father’s Day as well as during the Christmas period.
Your business may exceed the Value-Added Tax (VAT) threshold – currently, £85,000 – during such periods. This is a common occurrence for new as well as more established businesses.
Going above your VAT threshold can happen, and this can equally be overlooked if your business does not understand VAT rules.
In this article, we will look at what happens when you go above your VAT threshold. A few points to remember and how to deal with late submissions or late payments.
The article concludes with frequently asked questions to ensure that you make informed decisions about your company’s taxation and avoid hefty fines from HMRC.
What can I do if I go over the VAT threshold?
As a business or entrepreneur, the first thing you want to do is establish exactly what month or year you exceeded your VAT threshold. After establishing the date when you exceeded the VAT threshold, you should register for your VAT immediately.
This should cover the date when you first exceeded your VAT threshold and it is preferable that you register well before and not after you exceed the HMRC threshold.
You may be required to pay this in addition to hefty fines if you are investigated by HMRC and your VAT exceeds the threshold prior to registration, you will be required to pay this, and this may equally come with hefty fines.
Once registered and after having obtained a VAT number, you should complete all the VAT returns and make sure all the income earned during and before your VAT exceeds the threshold is declared.
Remember that all “Vatable” purchases should equally be declared to ensure that your business benefits from tax breaks or incentives for businesses in your category. You may submit a manual VAT return to cover all the back-dated returns under the Making Tax Digital Scheme.
Once updated on the accounting software, HMRC will realign all past returns whilst ensuring that all future returns can be submitted digitally.
Few points to remember if you find yourself in this situation
- Make sure you check the current VAT threshold
- The VAT threshold is calculated on a 12-month rolling basis and not the financial year or tax year.
- Make sure you are voluntarily registered well in advance to avoid surprises and hefty fines from HMRC
- Registration should backdate to the period before you went over the threshold
- If you volunteer, you may be investigated but will pay fewer fines than if HMRC found out.
What if I temporarily go above the VAT threshold?
If your turnover exceeds the VAT threshold and you are certain that this is a one-off event or temporary, you are entitled to ask HMRC for a VAT exemption. In order to do this, you must send a written request to HMRC within 30 days after you first exceed your VAT threshold.
If you are certain that this situation was temporary:
- You must show the HMRC proof that you will not exceed your VAT threshold in the next 12 months.
- HMRC will then inform you if they grant you a waiver or if you are required to register.
What about late submission or late payment?
To determine your penalties, HMRC looks at your turnover and how many times you have submitted your VAT late. For every late VAT submission or payment, HMRC will record a default.
The surcharge is based on the percentage VAT that is due for that quarter. If the value of the VAT is unknown to HMRC, they will likely estimate the surcharge.
How can I avoid hefty payments?
You may ask for an exception whilst notifying HMRC that you are unlikely to exceed your VAT threshold if the VAT breach was a one-off.
You can also make sure that you are voluntarily registered if you are uncertain about the likelihood of your sales exceeding the VAT threshold in the future. You may equally deregister if your turnover remains below the VAT threshold.
How do I de-register?
To deregister, check the VAT threshold, which is lower than the registration threshold. You may only deregister if you are going out of business, stopping all operations in the U.K. In some cases, you may deregister if you are certain that your sales will stay below HMRC’s threshold.
- Deregister using your VAT account and keep all transactions after filing until HMRC approves your deregistration.
- You are required to file a final VAT return from the date of your most recent VAT period until the date you deregister.
Frequently Asked Questions
How to deal with errors on VAT returns
You can amend any errors on your next VAT return. However, if the total value of your error is more than £10,000 of 1% of your VAT returns, you should report this to HMRC using the error notification form, VAT652
What should I do if I exceeded the VAT threshold in the past 12 months?
If your taxable VAT turnover was more than £85,000, you are required to register within 30 days. The first day of the second month after you exceeded your VAT threshold is the effective registration date. This will prevent you from paying any fines.
Can I claim VAT on purchases from before registration?
You can claim specific items after you register and submit your first return, however, there is a time limit for each item. For example, the Spring 2021 budget will include a finance bill that sets out specific provisions regarding VAT recovery on pre-registration purchases.
by Jay Redman | Jul 8, 2021 | UK Updates
How to Register for VAT Quickly
Most enterprises, including partnerships and groups of corporations filing under one VAT number, can register online.
You’ll be able to register for VAT and create a VAT online account (also known as a “Government Gateway account”) by doing so. This is required to submit VAT returns to HM Revenue and Customs (HMRC).
Register for VAT Online: A Step-by-Step Guide to Registering for Your VAT
To register for a VAT number, click on this link from Gov.UK. You will then reach the landing page, with an option to log in if you are a returning user. However, under the green sign-in button, you can create an account and register your details if this is your first time on this website.
In order to keep your information secure, HMRC recently announced that businesses and organisations using its services will be required to use an access code to sign in.
As a business owner, you are not required to do anything until HMRC asks you to add your device. This change is quite recent and was introduced on June 15th 2021.
Use an Agent
Registering via an agent is costly and time-consuming. However, there are a million time-saving reasons why some people will resort to using an agent.
You can hire an accountant (or agent) to handle your VAT returns and dealings with HMRC. You can sign up for a VAT online account and choose the option “VAT submit returns” once you have received your VAT number from HMRC.
Speak to one of our Accounting and VAT specialists at Sterlinx Global for your E-commerce business, if you are struggling to keep up with the HMRC guidelines.
Registering by Post
This is by far the slowest and least efficient way to sign up for a VAT number. Even as businesses across the country try to cut their carbon footprint, there are several reasons why you may prefer to register by post.
- If you are an EU business that sells to Ireland without a physical presence or location, use the VAT1A.
- If you import goods into Northern Ireland of over £85,000 from any EU country, use the VAT1B.
- If you’re disposing of any assets of which the 8th and 13th directive refunds have been claimed, use the VAT1C.
Don’t forget that when you receive your VAT number from HMRC, you may sign up for a VAT online account and select the option “VAT submit returns”.
Registering by post is a lengthy way to obtain a VAT number, but it remains a viable option if all else fails. However, HMRC has been digitizing over the years, to the point of enabling businesses to link and pay their VAT directly.
Things You Need to Know
Before you set out to register for a VAT number, there are several requirements that you must fulfil. You must provide information or details on things such as your annual revenue or turnover, bank account details, and business activity.
The ‘effective date of registration’ is the day on which you registered. From this date forward, you must pay any VAT payable to HMRC. You don’t have to give an agent permission to register you for VAT, which is why it is advisable to do it online.
Getting Your VAT Registration Certificate
A VAT registration certificate should arrive within 30 working days, but it may take longer. It’s sent either to your VAT online account or by mail if you’re registered by an agency/agent or can’t register online.
However, registering online for a VAT account as well as a VAT number is by far the easiest and quickest way to receive a response from HMRC.
Frequently Asked Questions
Is VAT registration compulsory?
You are only ever required to apply for VAT if your VAT taxable turnover is greater than £85,000, if you plan to exceed this threshold in the coming 12 months or did so in the past 12 months. You could also choose to do voluntary registration before meeting the VAT thresholds. Depending on the types of goods or services you sell and where you sell them, you may equally need to register for a VAT number.
What should I do if I exceeded the VAT threshold in the past 12 months?
When you reach the threshold, you must register within 30 days of the end of the month. The first day of the second month after you cross the threshold is the effective date of your registration.
What if you sell a product that is VAT exempt and resides in Northern Ireland?
If you only sell exempt or ‘out of scope’ goods or services but buy goods for more than £85,000 from EU VAT-registered suppliers to use in your business, you are required to register for a VAT number.
Conclusion
Not all businesses are required to register for VAT, but it is important to register if you are a business whose turnover exceeds £85,000. Registering for a VAT number is simple and straightforward.
To complete your registration, ensure you have all the necessary documentation ready. This article is a guide to enable you to register quickly and make the most informed decisions.
by Jay Redman | Feb 9, 2021 | European VAT
Amazon Pan-European Fulfilment (Pan-EU FBA)
Amazon Pan-European Fulfilment (Pan-EU FBA) is a fulfilment option set by Amazon for sellers using FBA. Pan-EU allows sellers to store, sell and deliver their inventory from a local fulfilment centre in multiple countries throughout the EU. This is known to be an excellent opportunity for a seller to expand and give a larger sales potential, in which to scale your business by maximising your turnover and profits.
As of November 2020, Pan-EU currently operates in the 7 countries listed below, with many more to be added to the list soon.
- UK
- France
- Germany
- Spain
- Italy
- Poland
- Czech Republic
Tax Compliance in the EU
As you can imagine, this programme can come with a few complications, but nothing that can’t be resolved with a specialist’s help! Participating in the Pan-EU programme means that you are required to have a VAT number for each country.
Individual countries have their own laws and regulations set by the local Tax offices and Governments that must be followed. In some countries, you may be required to submit your VAT filings monthly and in others quarterly. It is beneficial for you to have a specialist Tax consultant submit these on your behalf.
Preparing all the relevant documents required and being able to obtain your VAT number in each country can be a timely process, don’t let this overwhelm you!
Amazon Fees for Pan-EU
As mentioned earlier, Pan-EU allows you to store in various fulfilment centres within Europe. This means you are liable to pay the local fulfilment fee. This fee consists of the fulfilment fee and the storage fee.
Fulfilment Fee: Based on the size and weight of the product (per unit)
Storage Fee: Depending on the storage fee of the particular country you are selling in.
Is Pan-EU Good for My Business?
Now that you are a Pan-EU FBA seller, you are storing in multiple countries within the EU, which makes your product available to a larger market. Your business is given higher visibility due to the Amazon Prime status you now hold, which results in a larger sales potential for your business.
Of course another quite obvious advantage – given that you are now storing your products within different countries, limits the time taken to ship orders to your customers. These are now easily dispatched from the closest fulfilment centre to your customer.
Conclusion
Although the Pan-EU FBA programme may seem rather complex it can also be largely profitable. It will enable you to take your business to the next level. Your customer outreach will naturally expand as you begin to sell in the EU. For more information on our PAN EU FBA services, contact Sterlinx Global and book in for a consultation with one of our specialists to get your free quotation now.
