{"id":179119,"date":"2025-02-01T12:00:56","date_gmt":"2025-02-01T12:00:56","guid":{"rendered":"http:\/\/realbusiness.co.uk\/?p=179119"},"modified":"2025-03-25T11:33:31","modified_gmt":"2025-03-25T11:33:31","slug":"how-to-check-company-vat-registry","status":"publish","type":"post","link":"https:\/\/realbusiness.co.uk\/how-to-check-company-vat-registry","title":{"rendered":"How To Check If A Company Is VAT Registered"},"content":{"rendered":"<div class='booster-block booster-read-block'><\/div><p data-pm-slice=\"1 1 []\"><strong>HMRC collect Value Added Tax (VAT) through charging VAT at the point of sale on most goods and services in the UK. Businesses registered for VAT can charge VAT on their sales of goods and services, but offset it against the VAT they are charged when purchasing products for their business when they reclaim the tax on those purchases. Businesses must register for VAT if their annual taxable turnover is above \u00a390,000 in a 12 month period. <\/strong><\/p>\n<p>But why might you need to check if a company is VAT registered?<\/p>\n<ul>\n<li>If you are buying from a business, you need to know if VAT should be charged.<\/li>\n<li>If you are selling to a business customer, you need to determine whether to charge VAT on sales.<\/li>\n<li>When carrying out due diligence on new suppliers or customers.<\/li>\n<li>To determine the size and turnover of businesses you interact with.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p>This article will explain several methods for checking if a company is registered for VAT in the UK.<\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_74 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-684fdd59a8f96\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-684fdd59a8f96\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/realbusiness.co.uk\/how-to-check-company-vat-registry\/#What_Is_A_VAT_Number\" >What Is A VAT Number?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/realbusiness.co.uk\/how-to-check-company-vat-registry\/#Check_The_Companys_Website\" >Check The Company's Website<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/realbusiness.co.uk\/how-to-check-company-vat-registry\/#Use_The_HMRC_VAT_Number_Checker\" >Use The HMRC VAT Number Checker<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/realbusiness.co.uk\/how-to-check-company-vat-registry\/#Search_On_The_VAT_Information_Exchange_System\" >Search On The VAT Information Exchange System<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/realbusiness.co.uk\/how-to-check-company-vat-registry\/#Contact_HMRC\" >Contact HMRC<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/realbusiness.co.uk\/how-to-check-company-vat-registry\/#Search_Business_Information_Databases\" >Search Business Information Databases<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/realbusiness.co.uk\/how-to-check-company-vat-registry\/#Ask_The_Business_Directly\" >Ask The Business Directly<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/realbusiness.co.uk\/how-to-check-company-vat-registry\/#Confirming_Overseas_VAT_Numbers\" >Confirming Overseas VAT Numbers<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/realbusiness.co.uk\/how-to-check-company-vat-registry\/#European_Union_Countries\" >European Union Countries<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/realbusiness.co.uk\/how-to-check-company-vat-registry\/#Non-EU_Countries\" >Non-EU Countries<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/realbusiness.co.uk\/how-to-check-company-vat-registry\/#When_To_Check_VAT_Numbers\" >When To Check VAT Numbers<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/realbusiness.co.uk\/how-to-check-company-vat-registry\/#Taking_On_A_New_Customer\" >Taking On A New Customer<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/realbusiness.co.uk\/how-to-check-company-vat-registry\/#Making_Sales_To_A_New_EU_Country\" >Making Sales To A New EU Country<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/realbusiness.co.uk\/how-to-check-company-vat-registry\/#Processing_Sales_Orders\" >Processing Sales Orders<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/realbusiness.co.uk\/how-to-check-company-vat-registry\/#Updating_Supplier_Records\" >Updating Supplier Records<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/realbusiness.co.uk\/how-to-check-company-vat-registry\/#Financial_Auditing\" >Financial Auditing<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/realbusiness.co.uk\/how-to-check-company-vat-registry\/#Due_Diligence_On_MergersAcquisitions\" >Due Diligence On Mergers\/Acquisitions<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/realbusiness.co.uk\/how-to-check-company-vat-registry\/#Tax_Authority_Reviews\" >Tax Authority Reviews<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/realbusiness.co.uk\/how-to-check-company-vat-registry\/#Output_VAT_Rates\" >Output VAT Rates<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/realbusiness.co.uk\/how-to-check-company-vat-registry\/#Input_VAT_Recovery\" >Input VAT Recovery<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/realbusiness.co.uk\/how-to-check-company-vat-registry\/#VAT_Compliance_Software\" >VAT Compliance Software<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-22\" href=\"https:\/\/realbusiness.co.uk\/how-to-check-company-vat-registry\/#VAT_Registration_Certificates\" >VAT Registration Certificates<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-23\" href=\"https:\/\/realbusiness.co.uk\/how-to-check-company-vat-registry\/#Penalties_For_VAT_Errors\" >Penalties For VAT Errors<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-24\" href=\"https:\/\/realbusiness.co.uk\/how-to-check-company-vat-registry\/#Consider_VAT_Exemptions\" >Consider VAT Exemptions<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-25\" href=\"https:\/\/realbusiness.co.uk\/how-to-check-company-vat-registry\/#Consequences_Of_Not_Checking_VAT_Status\" >Consequences Of Not Checking VAT Status<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-26\" href=\"https:\/\/realbusiness.co.uk\/how-to-check-company-vat-registry\/#When_VAT_Checks_Are_Mandatory\" >When VAT Checks Are Mandatory<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-27\" href=\"https:\/\/realbusiness.co.uk\/how-to-check-company-vat-registry\/#How_To_Register_A_Business_For_VAT\" >How To Register A Business For VAT<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-28\" href=\"https:\/\/realbusiness.co.uk\/how-to-check-company-vat-registry\/#Business_VAT_Number_Summary\" >Business VAT Number Summary<\/a><\/li><\/ul><\/nav><\/div>\n\n<h2><span class=\"ez-toc-section\" id=\"What_Is_A_VAT_Number\"><\/span><strong>What Is A VAT Number?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>A VAT registration number, or simply a company&#8217;s VAT number, is a unique reference number allocated to a business when it registers for VAT. It is the main way to identify VAT-registered companies. VAT numbers follow a standard format:<\/p>\n<ul>\n<li>UK VAT registration numbers begin with GB followed by 9 digits, for example GB123456780<\/li>\n<li>EU VAT registration numbers start with the 2-letter country code, then up to 12 digits, for example: DE123456789<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p>VAT-registered businesses must display their VAT number on sales invoices and websites.<\/p>\n<h2><strong>Check The Company&#8217;s Website<\/strong><\/h2>\n<p data-pm-slice=\"1 1 []\">The easiest way to initially check for a company VAT registration is to look on their website. Check some of the following areas:<\/p>\n<ul>\n<li><strong>Footer<\/strong> \u2013 Many companies display their valid VAT registration number in the footer or bottom section of their website.<\/li>\n<li><strong>About Us\/Legal Information<\/strong> \u2013 Business VAT number details are often listed under \u2018About&#8217; or legal information pages for a VAT registered business too.<\/li>\n<li><strong>Contact Us<\/strong> \u2013 Some businesses include VAT numbers on their contact page.<\/li>\n<li><strong>Invoices\/Quotes<\/strong> \u2013 If sample invoices or quotes are published, check these for a VAT number. A valid VAT invoice is easy enough to spot, as the supplier&#8217;s VAT number will usually be clear.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p>If the VAT number is displayed, you can assume the company is registered for VAT. However, not showing a number doesn&#8217;t confirm they are not registered. So this method should not be solely relied upon.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Use_The_HMRC_VAT_Number_Checker\"><\/span><strong>Use The HMRC VAT Number Checker<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>HMRC provides an official VAT number-checking tool on the GOV.UK website. This directly accesses HMRC&#8217;s VAT registration data and shows VAT registration numbers for the relevant business. To use it to validate a UK VAT number:<\/p>\n<ol>\n<li>Go to <a href=\"https:\/\/gov.uk\/check-uk-vat-number\" target=\"_blank\" rel=\"noopener noreferrer\">https:\/\/www.gov.uk\/check-uk-vat-number<\/a><\/li>\n<li>Click \u2018Start now&#8217; and enter the VAT number to be checked.<\/li>\n<li>Select the date you want to check the VAT status.<\/li>\n<li>Choose if you want to generate a PDF receipt of the check.<\/li>\n<li>Click \u2018Check number&#8217;.<\/li>\n<\/ol>\n<p>&nbsp;<\/p>\n<p>It will then confirm if the number is valid and registered on the date entered. This is the most accurate way to check a UK VAT number is still valid.<\/p>\n<p><img fetchpriority=\"high\" decoding=\"async\" class=\"alignnone wp-image-192096 size-large lazyload\" src=\"data:image\/gif;base64,R0lGODlhAQABAIAAAAAAAP\/\/\/yH5BAEAAAAALAAAAAABAAEAAAIBRAA7\" data-src=\"https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/11\/shutterstock_2111420807-min-1024x683.jpg\" alt=\"VAT number checker\" width=\"800\" height=\"534\" \/><noscript><img decoding=\"async\" class=\"alignnone wp-image-192096 size-large lazyload\" src=\"https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/11\/shutterstock_2111420807-min-1024x683.jpg\" alt=\"VAT number checker\" width=\"800\" height=\"534\" srcset=\"https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/11\/shutterstock_2111420807-min-1024x683.jpg 1024w, https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/11\/shutterstock_2111420807-min-300x200.jpg 300w, https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/11\/shutterstock_2111420807-min-1536x1024.jpg 1536w, https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/11\/shutterstock_2111420807-min-2048x1365.jpg 2048w, https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/11\/shutterstock_2111420807-min-scaled.jpg 1200w\" sizes=\"(max-width: 800px) 100vw, 800px\" \/><\/noscript><\/p>\n<h2 data-pm-slice=\"1 3 []\"><span class=\"ez-toc-section\" id=\"Search_On_The_VAT_Information_Exchange_System\"><\/span><strong>Search On The VAT Information Exchange System<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The VAT Information Exchange System (VIES) is an EU-wide online search engine run by the European Commission for checking the validity of VAT numbers. To verify a UK VAT number using VIES:<\/p>\n<ol>\n<li>Go to the VIES website \u2013 <a href=\"http:\/\/ec.europa.eu\/taxation_customs\/vies\" target=\"_blank\" rel=\"noopener noreferrer\">http:\/\/ec.europa.eu\/taxation_customs\/vies\/<\/a><\/li>\n<li>Make sure you have the relevant country codes (in this case GB followed by the 9 digit number)<\/li>\n<li>Enter the UK VAT number you want to check.<\/li>\n<li>Select the United Kingdom as the country.<\/li>\n<li>Click \u2018Validate&#8217;.<\/li>\n<\/ol>\n<p>&nbsp;<\/p>\n<p>If valid, it will return the company name and address registered to that VAT number. This confirms they are VAT registered. If invalid, it will state \u2018no matching records found&#8217;. Reasons for this could include:<\/p>\n<ul>\n<li>The business is not VAT-registered.<\/li>\n<li>The VAT number is incorrect.<\/li>\n<li>The business trades under a different company name.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p>VIES only covers EU VAT numbers. It also relies on the data held being up to date. So further checks may be required.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Contact_HMRC\"><\/span><strong>Contact HMRC<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>You can also check if a business is VAT-registered by contacting HMRC directly. Call the HMRC VAT Helpline on 0300 200 3700 and provide the VAT number you want to validate. A HMRC adviser will then search the database and confirm if the number is registered to a business and if the status is active.<\/p>\n<p>This provides definitive confirmation directly from the tax authority. However, it is slower than using the online checker.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Search_Business_Information_Databases\"><\/span><strong>Search Business Information Databases<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Various commercial databases provide company information, including VAT registration details. Some options:<\/p>\n<ul>\n<li><strong>Companies House<\/strong> \u2013 Holds statutory information on UK limited companies. You can <a href=\"https:\/\/gov.uk\/get-information-about-a-company\" target=\"_blank\" rel=\"noopener noreferrer\">search for a company<\/a> and get details like their registered VAT number.<\/li>\n<li><strong>Creditsafe<\/strong> \u2013 Provides company credit reports with VAT registration status and history. You pay a fee to access full reports.<\/li>\n<li><strong>D&amp;B Hoovers<\/strong> \u2013 Business intelligence reports on public and private companies globally, covering VAT details. Subscription required.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p>These can provide useful confirmation of VAT status, but charges may apply for full reports.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Ask_The_Business_Directly\"><\/span><strong>Ask The Business Directly<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Contacting the company in question directly is often the quickest way to find out their VAT status. Call their accounts or sales department. Explain you need to check if they are VAT registered and ask them to provide their own VAT number.<\/p>\n<p>Most companies will happily confirm whether they are registered and supply evidence. However, sole traders and smaller firms may be reluctant to disclose this information without an active sales inquiry.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Confirming_Overseas_VAT_Numbers\"><\/span><strong>Confirming Overseas VAT Numbers<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>When trading internationally, you may need to verify VAT numbers from outside of the UK.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"European_Union_Countries\"><\/span><strong>European Union Countries<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>For EU trading partners, use the VIES system as explained above. Enter the country code and VAT number to check validity.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Non-EU_Countries\"><\/span><strong>Non-EU Countries<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>To validate VAT numbers from non-EU countries:<\/p>\n<ul>\n<li>Some countries provide official online VAT number checkers, similar to the UK&#8217;s system. Research if the tax authority in that country offers such a tool.<\/li>\n<li>Contact the foreign tax authority directly via phone or email. Many will perform checks on request.<\/li>\n<li>Engage a local tax agent or VAT specialist in that country to verify the number for you.<\/li>\n<li>Ask the overseas business to provide additional proof like their VAT registration certificate.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p>Checking non-EU VAT numbers tends to be more difficult without access to a central verification system.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"When_To_Check_VAT_Numbers\"><\/span><strong>When To Check VAT Numbers<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Certain business processes and events will trigger the need to check VAT numbers. Common occasions when VAT number validation is required:<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Taking_On_A_New_Customer\"><\/span><strong>Taking On A New Customer<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Validate their VAT details on signup before supplying to them. Do not rely on the VAT number being provided alone \u2013 check it is valid.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Making_Sales_To_A_New_EU_Country\"><\/span><strong>Making Sales To A New EU Country<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Once your distance sales to an EU country exceed the registration threshold, you must start charging VAT at their rate. Check customers&#8217; VAT numbers at this point.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Processing_Sales_Orders\"><\/span><strong>Processing Sales Orders<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Integrate VAT number validation into your sales order processing procedure. This will identify any fraudulent numbers.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Updating_Supplier_Records\"><\/span><strong>Updating Supplier Records<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Periodically check that your supplier VAT numbers remain valid and they are still registered.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Financial_Auditing\"><\/span><strong>Financial Auditing<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Include VAT number checks of key customers and suppliers as part of internal audits.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Due_Diligence_On_MergersAcquisitions\"><\/span><strong>Due Diligence On Mergers\/Acquisitions<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Review the VAT compliance of both entities as part of M&amp;A due diligence processes.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Tax_Authority_Reviews\"><\/span><strong>Tax Authority Reviews<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>If being reviewed by HMRC or overseas tax bodies, they may request evidence that you are verifying VAT numbers appropriately.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><img decoding=\"async\" class=\"wp-image-192098 size-large aligncenter lazyload\" src=\"data:image\/gif;base64,R0lGODlhAQABAIAAAAAAAP\/\/\/yH5BAEAAAAALAAAAAABAAEAAAIBRAA7\" data-src=\"https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/11\/shutterstock_2230118057-min-1024x631.jpg\" alt=\"when to check VAT registry\" width=\"800\" height=\"493\" \/><noscript><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-192098 size-large aligncenter lazyload\" src=\"https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/11\/shutterstock_2230118057-min-1024x631.jpg\" alt=\"when to check VAT registry\" width=\"800\" height=\"493\" srcset=\"https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/11\/shutterstock_2230118057-min-1024x631.jpg 1024w, https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/11\/shutterstock_2230118057-min-300x185.jpg 300w, https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/11\/shutterstock_2230118057-min-1536x946.jpg 1536w, https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/11\/shutterstock_2230118057-min-2048x1261.jpg 2048w, https:\/\/realbusiness.co.uk\/wp-content\/uploads\/2023\/11\/shutterstock_2230118057-min-scaled.jpg 1200w\" sizes=\"(max-width: 800px) 100vw, 800px\" \/><\/noscript><\/p>\n<h2 data-pm-slice=\"1 1 []\"><span class=\"ez-toc-section\" id=\"Output_VAT_Rates\"><\/span><strong>Output VAT Rates<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>VAT is usually charged at the standard rate of 20% in the UK. However, different rates apply in certain cases:<\/p>\n<ul>\n<li><strong>Zero-rated<\/strong> \u2013 0% VAT is charged on basic food, books, and children&#8217;s clothing for example.<\/li>\n<li><strong>Reduced rate<\/strong> \u2013 A 5% VAT rate applies to some goods like domestic fuel supplies.<\/li>\n<li><strong>Exempt<\/strong> \u2013 No VAT is charged on services like insurance or healthcare.<\/li>\n<li><strong>Imported goods<\/strong> \u2013 Import VAT may be payable if buying goods from outside the UK.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p>Checking a customer&#8217;s VAT registration status determines which rate you should apply to sales. If they are registered, you charge based on the goods or services supplied. If not registered, you must charge 20% VAT on all sales.<\/p>\n<p>So validating VAT numbers ensures you apply VAT at the correct rate too.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Input_VAT_Recovery\"><\/span><strong>Input VAT Recovery<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Recovering input VAT paid on purchases is a key benefit of VAT registration.<\/p>\n<p>To reclaim input tax, you must hold valid VAT invoices from registered suppliers. This is another reason why checking VAT numbers is important.<\/p>\n<p>Validating supplier VAT details verifies:<\/p>\n<ul>\n<li>They are legitimate and registered.<\/li>\n<li>Their invoices allow you to recover input tax.<\/li>\n<li>You are not paying VAT to fraudulent businesses.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p>Review input VAT regularly to identify any numbers that require further validation. Input tax recovery claims may be rejected if they are related to invalid VAT numbers.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"VAT_Compliance_Software\"><\/span><strong>VAT Compliance Software<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Using dedicated VAT compliance software can streamline the process of checking and validating VAT numbers. Features to look for include:<\/p>\n<ul>\n<li><strong>Real-time VAT number validation<\/strong> \u2013 Checks customer and supplier numbers against official databases as they are entered into your system.<\/li>\n<li><strong>Reporting<\/strong> \u2013 Activity reports detailing when VAT numbers were checked and the results. Useful for audit evidence.<\/li>\n<li><strong>VIES integration<\/strong> \u2013 Auto-syncs with the EU VIES database for live VAT number verification.<\/li>\n<li><strong>VAT determination<\/strong> \u2013 Calculates the correct VAT rates to charge based on validated VAT numbers.<\/li>\n<li><strong>Invoice integration<\/strong> \u2013 Adds validated VAT numbers to sales invoices.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p>Investing in smart software provides efficiency and control over VAT compliance.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"VAT_Registration_Certificates\"><\/span><strong>VAT Registration Certificates<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Once registered for VAT, businesses are issued with a VAT Registration Certificate by HMRC. This includes:<\/p>\n<ul>\n<li>Your unique VAT number<\/li>\n<li>Effective registration date<\/li>\n<li>Registered business name and address<\/li>\n<li>Registration turnover figure<\/li>\n<li>VAT accounting periods you will report under<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p>It formally certifies your business as VAT-registered. Display the certificate prominently on your premises as it may be requested by HMRC inspectors.<\/p>\n<p>When checking a supplier or customer&#8217;s VAT status, you can ask them to provide a copy of their VAT Registration Certificate as evidence.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Penalties_For_VAT_Errors\"><\/span><strong>Penalties For VAT Errors<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>HMRC treats VAT non-compliance very seriously. Fines and penalties apply for a range of VAT errors:<\/p>\n<ul>\n<li><strong>Late VAT registration<\/strong> \u2013 Failure to register on time once the VAT threshold is exceeded. Penalties up to 15% of VAT owed.<\/li>\n<li><strong>Late filing VAT returns<\/strong>\u00a0\u2013 Missing VAT return deadlines \u2013 fixed fines plus further penalties for ongoing delays.<\/li>\n<li><strong>Inaccurate VAT returns<\/strong> \u2013 Incorrect or incomplete VAT returns can attract penalties up to 100% of the VAT due.<\/li>\n<li><strong>Failing to charge VAT<\/strong> \u2013 Omitting VAT that should be charged on sales \u2013 fines up to 30% of the VAT due.<\/li>\n<li><strong>VAT fraud<\/strong> \u2013 Deliberately attempting to avoid VAT \u2013 penalties between 30-100% of evaded VAT. Could lead to criminal prosecution.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p>The seriousness of penalties makes VAT compliance essential. Cross-checking VAT numbers is the first line of defence in preventing non-compliance.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Consider_VAT_Exemptions\"><\/span><strong>Consider VAT Exemptions<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>If a business does not appear to be VAT registered, it may be covered by a VAT exemption.<\/p>\n<p>Certain business types do not have to register for VAT in the UK. This includes:<\/p>\n<ul>\n<li>Financial services e.g. insurance, banking<\/li>\n<li>Education providers<\/li>\n<li>Healthcare services<\/li>\n<li>Charities<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p>So the lack of VAT registration does not always indicate non-compliance. The rules on VAT exemptions are complex, so seek specialist advice if required.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Consequences_Of_Not_Checking_VAT_Status\"><\/span><strong>Consequences Of Not Checking VAT Status<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>There can be significant implications for interacting with non-VAT-compliant businesses:<\/p>\n<ul>\n<li><strong>Unpaid VAT<\/strong> \u2013 If you sell goods or services to a business that turns out to be fraudulent or unregistered, you remain liable for any unpaid VAT. This will come out of your profits.<\/li>\n<li><strong>Penalties<\/strong> \u2013 HMRC may impose financial penalties if you fail to carry out adequate checks on customers. Penalty fines are typically 15-30% of any VAT underpaid.<\/li>\n<li><strong>Loss of customer<\/strong> \u2013 VAT-dodging companies identified by HMRC are forced to cease trading. So you lose a customer and risk any money owed.<\/li>\n<li><strong>Reputation damage<\/strong> \u2013 Your business could suffer negative PR and scrutiny for neglecting VAT compliance processes.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p>Performing quick VAT number checks helps avoid these substantial risks.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"When_VAT_Checks_Are_Mandatory\"><\/span><strong>When VAT Checks Are Mandatory<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>There are certain cases where a legal obligation exists to verify VAT numbers:<\/p>\n<ul>\n<li>For <strong>EU cross-border sales<\/strong>, VAT rules say both parties must validate each other&#8217;s VAT numbers.<\/li>\n<li>When making <strong>distance sales<\/strong> over the VAT threshold for EU countries, the customer&#8217;s VAT number must be validated.<\/li>\n<li>To apply <strong>zero-rated VAT<\/strong> between UK VAT-registered businesses, their VAT status must be evidenced.<\/li>\n<li><strong>Online marketplaces<\/strong> are responsible for checking the VAT compliance of firms using their platform before selling.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p>Outside of these situations, verifying VAT numbers is considered best practice whenever trading with new business customers or suppliers.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"How_To_Register_A_Business_For_VAT\"><\/span><strong>How To Register A Business For VAT<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>If your turnover exceeds the current VAT threshold of \u00a390,000 per year, you must register your business with HMRC for VAT.<\/p>\n<p>The VAT registration process involves:<\/p>\n<ul>\n<li>Working out your total VAT taxable turnover to determine if registration is required.<\/li>\n<li>Choosing the effective registration date \u2013 can be backdated up to 4 months.<\/li>\n<li>Applying to HMRC via their website, by post or by phone.<\/li>\n<li>Receiving your VAT Registration Certificate and unique VAT number.<\/li>\n<li>Setting up VAT accounting procedures and software.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p>It is advisable to seek expert guidance when registering a small business for VAT, as there are various schemes and reporting options to consider.<\/p>\n<p>Once registered, you will need to charge VAT on sales, file regular VAT Returns and pay VAT to HMRC. There are various penalties for non-compliance so it is essential to maintain accurate VAT records.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Business_VAT_Number_Summary\"><\/span><strong>Business VAT Number Summary<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Checking whether a business is VAT-registered is important for both buyers and suppliers when trading with new companies.<\/p>\n<p>There are a few ways to check including:<\/p>\n<ul>\n<li>Search for the VAT number on the company&#8217;s website.<\/li>\n<li>Validate the VAT number through VIES or HMRC&#8217;s VAT number checker.<\/li>\n<li>Look up the company on business information databases.<\/li>\n<li>Contact HMRC or the business directly.<\/li>\n<li>Consider if the company is exempt from VAT registration.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p>Using a combination of these methods helps mitigate the risks of dealing with non-compliant firms. Dodging VAT checks can lead to substantial fines, unpaid taxes and lost business.<\/p>\n<p>A few quick searches can provide peace of mind that your business is transacting only with legitimate, VAT registered customers and suppliers. This ensures full compliance with VAT regulations.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>HMRC collect Value Added Tax (VAT) through charging VAT at the point of sale on most goods and services in the UK. Businesses registered for VAT can charge VAT on their sales of goods and services, but offset it against the VAT they are charged when purchasing products for their business when they reclaim the [&hellip;]<\/p>\n","protected":false},"author":26234,"featured_media":179121,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"footnotes":""},"categories":[11878],"tags":[12138,11968,12013,2618],"class_list":["post-179119","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-company-registry","tag-nov-p","tag-p2023","tag-vat"],"views":1723,"_links":{"self":[{"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/posts\/179119","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/users\/26234"}],"replies":[{"embeddable":true,"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/comments?post=179119"}],"version-history":[{"count":0,"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/posts\/179119\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/media\/179121"}],"wp:attachment":[{"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/media?parent=179119"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/categories?post=179119"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/realbusiness.co.uk\/wp-json\/wp\/v2\/tags?post=179119"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}