How to Check if a Company is VAT Registered

Worth Added Tax (VAT) is a consumption tax that’s charged on most items and providers bought inside the UK. It’s collected by HM Income & Customs (HMRC).

Companies with annual taxable turnover above a sure threshold should register for VAT within the UK. The present VAT registration threshold is £85,000 per yr.

As soon as registered, companies should cost VAT on their gross sales invoices and pay this VAT to HMRC. They will reclaim VAT paid on enterprise purchases.

There are numerous the reason why you might have to test whether or not a enterprise is VAT-registered or not:

• If you’re shopping for from a enterprise, it’s essential know if VAT must be charged.
• If you’re promoting to a enterprise buyer, it’s essential decide whether or not to cost VAT on gross sales.
• When finishing up due diligence on new suppliers or clients.
• To find out the dimensions and turnover of companies you work together with.

This text will clarify a number of strategies for checking if an organization is registered for VAT within the UK.

What’s a VAT quantity?

A VAT registration quantity, usually known as a VAT quantity, is a novel reference quantity allotted to a enterprise when it register for VAT.

It’s the most important approach to determine VAT-registered firms. VAT numbers comply with a normal format:

• UK VAT numbers start with GB adopted by 9 digits, for instance GB123456780
• EU VAT numbers begin with the 2-letter nation code, then as much as 12 digits, for instance: DE123456789

VAT-registered companies should show their VAT quantity on gross sales invoices and web sites.

Examine the corporate’s web site

The simplest approach to initially test if an organization is VAT registered is to look on their web site.

Go to the web site of the enterprise you have an interest in and test the next areas:

• Footer – Many firms show their VAT quantity within the footer or backside part of their web site.
• About Us/Authorized Data – VAT particulars are sometimes listed beneath ‘About’ or authorized info pages.
• Contact Us – Some companies embody VAT numbers on their contact web page.
• Invoices/Quotes – If pattern invoices or quotes are printed, test these for a VAT quantity.

If the VAT quantity is displayed, you may assume the corporate is registered for VAT. Nonetheless, not displaying a quantity doesn’t verify they aren’t registered. So this methodology shouldn’t be solely relied upon.

Use the HMRC VAT Quantity Checker

HMRC offers an official VAT number-checking device on the GOV.UK web site. This instantly accesses HMRC’s VAT registration information.

To make use of it to validate a UK VAT quantity:

1. Go to https://www.gov.uk/check-uk-vat-number
2. Click on ‘Begin now’ and enter the VAT quantity to be checked.
3. Choose the date you wish to test the VAT standing.
4. Select if you wish to generate a PDF receipt of the test.
5. Click on ‘Examine quantity’.

It would then verify if the quantity is legitimate and registered on the date entered. That is probably the most correct approach to test a UK VAT quantity.

Search on the VAT Data Change System

The VAT Data Change System (VIES) is an EU-wide on-line database for checking the validity of VAT numbers.

To confirm a UK VAT quantity utilizing VIES:

1. Go to the VIES web site – http://ec.europa.eu/taxation_customs/vies/
2. Enter the UK VAT quantity you wish to test.
3. Choose the UK because the nation.
4. Click on ‘Validate’.

If legitimate, it’s going to return the corporate identify and tackle registered to that VAT quantity. This confirms they’re VAT registered.

If invalid, it’s going to state ‘no matching information discovered’. Causes for this might embody:

• The enterprise isn’t VAT-registered.
• The VAT quantity is inaccurate.
• The enterprise trades beneath a unique firm identify.

VIES solely covers EU VAT numbers. It additionally depends on the information held being updated. So additional checks could also be required.

Contact HMRC

You may also test if a enterprise is VAT-registered by contacting HMRC instantly.

Name the VAT Helpline on 0300 200 3700 and supply the VAT quantity you wish to validate.

An HMRC adviser will then search the database and ensure if the quantity is registered to a enterprise and if the standing is energetic.

This offers definitive affirmation instantly from the tax authority. Nonetheless, it’s slower than utilizing the net checker.

Search enterprise info databases

Varied business databases present firm info, together with VAT registration particulars. Some choices:

• Corporations Home – Holds statutory info on UK restricted firms. You’ll be able to search for an organization and get particulars like their registered VAT quantity.
• Creditsafe – Supplies firm credit score reviews with VAT registration standing and historical past. You pay a price to entry full reviews.
• D&B Hoovers – Enterprise intelligence reviews on private and non-private firms globally, masking VAT particulars. Subscription required.

These can present helpful affirmation of VAT standing, however expenses might apply for full reviews.

Ask the enterprise instantly

Contacting the corporate in query instantly is usually the quickest approach to discover out their VAT standing.

Name their accounts or gross sales division. Clarify it’s essential test if they’re VAT registered and ask them to offer their VAT quantity.

Most firms will fortunately verify whether or not they’re registered and provide proof. Nonetheless, sole merchants and smaller corporations could also be reluctant to reveal this info with out an energetic gross sales inquiry.

Confirming abroad VAT numbers

When buying and selling internationally, you might have to confirm VAT numbers from outdoors of the UK.

EU nations

For EU buying and selling companions, use the VIES system as defined above. Enter the nation code and VAT quantity to test validity.

Non-EU nations

To validate VAT numbers from non-EU nations:

• Some nations present official on-line VAT quantity checkers, just like the UK’s system. Analysis if the tax authority in that nation presents such a device.
• Contact the international tax authority instantly by way of cellphone or e mail. Many will carry out checks on request.
• Interact a neighborhood tax agent or VAT specialist in that nation to confirm the quantity for you.
• Ask the abroad enterprise to offer extra proof like their VAT registration certificates.

Checking non-EU VAT numbers tends to be harder with out entry to a central verification system.

When to test VAT numbers

Sure enterprise processes and occasions will set off the necessity to test VAT numbers. Frequent events when VAT quantity validation is required:

Taking over a brand new buyer

• Validate their VAT particulars on signup earlier than supplying to them. Don’t depend on the VAT quantity being supplied alone – test it’s legitimate.

Making gross sales to a brand new EU nation

• As soon as your distance gross sales to a different EU nation exceed the registration threshold, you could begin charging VAT at their price. Examine clients’ VAT numbers at this level.

Processing gross sales orders

• Combine VAT quantity validation into your gross sales order processing process. This can determine any fraudulent numbers.

Updating provider information

• Periodically test that your provider VAT numbers stay legitimate and they’re nonetheless registered.

Monetary auditing

• Embody VAT quantity checks of key clients and suppliers as a part of inner audits.

Due diligence on mergers/acquisitions

• Evaluation the VAT compliance of each entities as a part of M&A due diligence processes.

Tax authority evaluations

• If being reviewed by HMRC or abroad tax our bodies, they could request proof that you’re verifying VAT numbers appropriately.

Being proactive with VAT checks at key enterprise occasions reduces danger and ensures you might have present info.

Output VAT charges

VAT is often charged at the usual price of 20% within the UK. Nonetheless, completely different charges apply in sure instances:

• Zero-rated – 0% VAT is charged on primary meals, books, and kids’s clothes for instance.
• Lowered price – A 5% VAT price applies to some items like home gasoline provides.
• Exempt – No VAT is charged on providers like insurance coverage or healthcare.
• Imported items – Import VAT could also be payable if shopping for items from outdoors the UK.

Checking a buyer’s VAT registration standing determines which price it is best to apply to gross sales.

If they’re registered, you cost primarily based on the products or providers provided.

If not registered, you could cost 20% VAT on all gross sales.

So validating VAT numbers ensures you apply VAT on the appropriate price.

Enter VAT restoration

Recovering enter VAT paid on purchases is a key good thing about VAT registration.

To reclaim enter tax, you could maintain legitimate VAT invoices from registered suppliers. That is another excuse why checking VAT numbers is essential.

Validating provider VAT particulars verifies:

• They’re official and registered.
• Their invoices can help you get well enter tax.
• You aren’t paying VAT to fraudulent companies.

Evaluation enter VAT often to determine any numbers that require additional validation. Enter tax restoration claims could also be rejected if they’re associated to invalid VAT numbers.

VAT compliance software program

Utilizing devoted VAT compliance software program can streamline the method of checking and validating VAT numbers. Options to search for embody:

• Actual-time VAT quantity validation – Checks buyer and provider numbers in opposition to official databases as they’re entered into your system.
• Reporting – Exercise reviews detailing when VAT numbers have been checked and the outcomes. Helpful for audit proof.
• VIES integration – Auto-syncs with the EU VIES database for reside VAT quantity verification.
• VAT willpower – Calculates the proper VAT charges to cost primarily based on validated VAT numbers.
• Bill integration – Provides validated VAT numbers to gross sales invoices.

Investing in good software program offers effectivity and management over VAT compliance.

VAT registration certificates

As soon as registered for VAT, companies are issued with a VAT Registration Certificates by HMRC. This contains:

• Your distinctive VAT quantity
• Efficient registration date
• Registered enterprise identify and tackle
• Registration turnover determine
• VAT accounting durations you’ll report beneath

It formally certifies your corporation as VAT-registered. Show the certificates prominently in your premises as it might be requested by HMRC inspectors.

When checking a provider or buyer’s VAT standing, you may ask them to offer a duplicate of their VAT Registration Certificates as proof.

Penalties for VAT errors

HMRC treats VAT non-compliance very severely. Fines and penalties apply for a variety of VAT errors:

• Late VAT registration – Failure to register on time as soon as the VAT threshold is exceeded. Penalties as much as 15% of VAT owed.
• Late VAT submitting – Lacking VAT return deadlines – mounted fines plus additional penalties for ongoing delays.
• Inaccurate VAT returns – Incorrect or incomplete VAT returns can entice penalties as much as 100% of the VAT due.
• Failing to cost VAT – Omitting VAT that must be charged on gross sales – fines as much as 30% of the VAT due.
• VAT fraud – Intentionally making an attempt to keep away from VAT – penalties between 30-100% of evaded VAT. May result in legal prosecution.

The seriousness of penalties makes VAT compliance important. Cross-checking VAT numbers is the primary line of defence in stopping non-compliance.

Think about VAT exemptions

If a enterprise doesn’t look like VAT registered, it might be coated by a VAT exemption.

Sure enterprise sorts shouldn’t have to register for VAT within the UK. This contains:

• Monetary providers e.g. insurance coverage, banking
• Schooling suppliers
• Healthcare providers
• Charities

So the dearth of VAT registration doesn’t all the time point out non-compliance. The foundations on VAT exemptions are complicated, so search specialist recommendation if required.

Penalties of not checking VAT standing

There will be vital implications for interacting with non-VAT-compliant companies:

• Unpaid VAT – In the event you promote items or providers to a enterprise that seems to be fraudulent or unregistered, you stay responsible for any unpaid VAT. This can come out of your income.
• Penalties – HMRC might impose monetary penalties for those who fail to hold out ample checks on clients. Penalty fines are sometimes 15-30% of any VAT underpaid.
• Lack of buyer – VAT-dodging firms recognized by HMRC are compelled to stop buying and selling. So that you lose a buyer and danger any cash owed.
• Reputational injury – Your corporation might undergo adverse PR and scrutiny for neglecting VAT compliance processes.

Performing fast VAT quantity checks helps keep away from these substantial dangers.

When VAT checks are necessary

There are particular instances the place a authorized obligation exists to confirm VAT numbers:

• For EU cross-border gross sales, VAT guidelines say each events should validate one another’s VAT numbers.
• When making distance gross sales over the VAT threshold for different EU nations, the client’s VAT quantity have to be validated.
• To use zero-rated VAT between UK VAT-registered companies, their VAT standing have to be evidenced.
• On-line marketplaces are liable for checking the VAT compliance of corporations utilizing their platform earlier than promoting.

Outdoors of those conditions, verifying VAT numbers is taken into account finest apply each time buying and selling with new enterprise clients or suppliers.

The best way to register a enterprise for VAT

In case your turnover exceeds the present VAT threshold of £85,000 per yr, you could register your corporation with HMRC for VAT.

The VAT registration course of includes:

• Understanding your whole VAT taxable turnover to find out if registration is required.
• Selecting the efficient registration date – will be backdated as much as 4 months.
• Making use of to HMRC by way of their web site, by publish or by cellphone.
• Receiving your VAT Registration Certificates and distinctive VAT quantity.
• Establishing VAT accounting procedures and software program.

It’s advisable to hunt skilled steering when registering for VAT, as there are numerous schemes and reporting choices to think about.

As soon as registered, you’ll need to cost VAT on gross sales, file common VAT Returns and pay VAT to HMRC. There are numerous penalties for non-compliance so it’s important to keep up correct VAT information.

Abstract

Checking whether or not a enterprise is VAT-registered is essential for each consumers and suppliers when buying and selling with new firms.

The primary methods to test are:

• Seek for the VAT quantity on the corporate’s web site.
• Validate the VAT quantity by means of VIES or HMRC’s VAT quantity checker.
• Lookup the corporate on enterprise info databases.
• Contact HMRC or the enterprise instantly.
• Think about if the corporate is exempt from VAT registration.

Utilizing a mix of those strategies helps mitigate the dangers of coping with non-compliant corporations. Dodging VAT checks can result in substantial fines, unpaid taxes and misplaced enterprise.

A number of fast searches can present peace of thoughts that your corporation is transacting solely with official, VAT registered clients and suppliers. This ensures full compliance with VAT laws.