There are many reasons why a business might need a VAT Number quickly, whether it be a single self-employed trader or a larger limited company. It might be because the business experiences a larger than expected sales increase or perhaps they’ve picked up an export order, which means that a VAT Number is needed before they can complete the necessary paperwork.
VAT Registration: How do you apply?
Most businesses can register online, including partnerships and sole-traders; but first you’ll have to jump through a series of hoops to create a VAT online account (sometimes known as a ‘Government Gateway account’), before submitting your application. Alternatively, you can make your life a little easier by getting your accountant to do it for you.
You can also make a paper application by post, which is mandatory for a handful of categories, such as you wanting to join the Agricultural Flat Rate Scheme.
VAT Registration: How long will it take?
HMRC’s website cheerfully announces that you should get a VAT registration certificate within 30 working days; but then adds the caveat, ‘though it can take longer’.
Over the last couple of years, all accountants and many businesses would agree that this little phrase, has been a gross understatement, with waiting times regularly taking up to six months and occasionally longer!
It would appear that Meg Hillier, the Chair of the Public Accounts Committee, agrees with the accountancy profession as earlier this year she lambasted HMRC for “gross inefficiency and very poor customer service”. In particular, Ms Hillier, highlighted the problems faced by small businesses trying to fulfil an export order and failing because of the bureaucratic nightmare of dealing with HMRC.
Ms Hillier commented further, that “a delay of up to six months, merely to obtain a VAT Registration Number, was “totally unacceptable and that “HMRC needs to urgently get its house in order”.
VAT Registration: What is the situation now?
To my surprise it does appear that HMRC, perhaps stung by Ms Hillier’s comments, have made significant efforts to address the problem of late, as the following recent case of mine will demonstrate.
Example: My client (I’ll refer to him as Joe) contacted me in a panic as he’d just done his quarterly accounts and discovered to his horror, that he’d exceeded the VAT registration threshold because of an unexpected sales increase for his business over the summer.
I gave Joe an emergency appointment and made an online application to register him for VAT (luckily Joe already had a Government Gateway account). To my amazement, Joe now has his VAT number and – pause for dramatic effect – it came through just five days after the application was submitted to HMRC. Joe was thrilled because I had told him that HMRC was quoting a Thirty-day turnaround period to deal with online applications, but that in my experience it could and probably would, take much longer.
I then contacted a number of other accountants and I was pleasantly surprised that everyone had experienced much quicker turnaround times recently – but five days was the quickest!
VAT Registration: Lessons learnt
From my own experience and anecdotal feedback from other accountants, all of which had seen recent VAT applications go through within a 30-day timescale; I have come to the following conclusions which will hopefully help you get a VAT Number as quickly as possibly:
- Apply for a Government Gateway account now, as it is not just VAT it’s used for
- Make your application online
- Be absolutely clear about dates. A lot of delays with VAT registration applications are caused by confusion with dates. There are 2 critical questions to consider:
a – What is the compulsory date of registration?
b – Do I want to register earlier than the compulsory date (possibly up to four years ago)?
If the answer to the second question is ‘no’ – then the compulsory date is a fait accompli – end of story. No other dates are relevant.
Tax Accountant’s view
I do appreciate that some VAT registration applications do take longer, such as anything property-related, where delays are much more common because of the extra VAT complexities involved. I am, however, hopeful that my recent positive experience with the VAT registration process is repeated, as anecdotally it has by many other accountants recently.
In my many years in the trenches, I have seen a few false dawns, but hopefully, my recent experience may just indicate that HMRC’s post-Brexit and post-Pandemic crises are now rapidly receding – fingers crossed!