What is VAT Registration? How to get a VAT Number for a UK company?

Ryan Patrick

Feb 12, 2024 • 5 min read

Are you planning to operate a company in the United Kingdom? The first thing to do is to register with tax authorities. Every individual or enterprise must pay taxes to the UK government. Among the taxes you will pay is value-added tax (VAT). To pay for the VAT, you must first apply for registration.

This blog provides insight into how to register for the VAT in the UK and the registration process. We will also discuss how to transfer and cancel the VAT registration. Let's get started.

When to Apply for VAT Number in the UK

Before applying for the VAT, you must ensure you need the number. Remember, not all businesses in the UK are eligible to apply for the VAT. Qualifying for the VAT will depend on your business location and your revenue.

The first qualification for VAT application in the UK is that your company should reach a threshold of £85,000 per year. So if your turnover exceeds £85,000, or you expect the VAT taxable to exceed this amount in 30 days, you must register for the VAT. But you shouldn't get the UK VAT number if your company does not reach the threshold.

You may also register for VAT voluntarily and enjoy some benefits. For instance, you can reclaim VAT on items and services your business purchases.

If you're operating a business outside the UK and there's no established threshold, you must register for UK VAT on supplying your goods and services in the UK. You can also register if you expect to deliver in 30 days.

Procedure of VAT Registration

To register for the UK VAT, you must have these documents

A tax identifier or national insurance number
Certificate of incorporation
Business bank details
Information about the business you have connected in the past two years
Information of business transfer, if applicable
Identification of proof for the company representative (HMRC mandates one photo ID and two additional secondary ID proofs).

After having all the documents, you can apply online since it's the easiest way to register. Go to the HMRC site and create a Government Gateway Account. To create the online account, you must:

Provide your email address
Enter the HMRC confirmation code sent to your email address
Give out your name
Create a password of eight to 12 characters
Create recovery password
Choose the type of account you want
Answer the six questions that confirm you're eligible for VAT registration
Fill out the online VAT registration form

You will use this account to submit to the HMRC business VAT return later. The HMRC will send you the VAT number and a certificate in 30 days through your Government Gateway Account.

You may also appoint an agent to help you register your business for UK VAT and liaise with HMRC on your behalf.

There are instances where you're required to register for VAT by post. This is in the case of:

You're applying for a registration exception
You would like to join the agricultural flat rate scheme
You wish to register various divisions or company units under different UK VAT numbers.

If applying via post-download, use the VAT1 form on the HMRC website. After sending and approving your application, the HMRC will send your VAT certificate in 30 days. From there, create your VAT online account.

What to do After getting a UK VAT Number

Upon receiving your VAT number, remember you're subjected to various VAT responsibilities. This means you must:

Include VAT in your pricing
Use accurate VAT invoices to your clients with different requirements depending on invoice type. See all the requirements on Gov.uk.
File for VAT return online quarterly, regardless of whether there's VAT to pay or reclaim.
Keep your digital VAT records and account.

These requirements ensure the VAT you charge and pay match. You will get a refund if you pay more than required when you submit your file return. When you pay less, it is a fraud, and you may face legal sanctions.

What Does a UK VAT Number Look Like?

UK VAT for companies contains 11 characters, two letters followed by nine numbers, although the beginning numbers may vary according to the location. Other countries have different VAT formats featuring a country code followed by characters or numbers. Here is HMRC information on different VAT numbers in the EU countries.

Where to Use UK VAT

The VAT number is a unique number that the HMRC uses to identify your business for VAT-related issues. You can use your valid VAT number when:

Creating an online VAT account with HMRC
Filing for quarterly VAT returns
Paying VAT bill
Completing EC sales list for businesses in northern islands
Issuing VAT invoices to customers
Contacting HMRC to talk about your VAT account
Buying products from specific VAT-registered suppliers
Appointing an agent or accountant to handle your tax affairs
Setting accounts with some suppliers
Recovering any VAT paid on goods and services purchased for business purposes.

Where do I Display the UK VAT Number?

After receiving your VAT number, you are legally obligated to display it on your company's website, invoices, and certain receipts. When trading with VAT registered companies in the EU, you must supply your VAT number. With that, they will zero rate (0%) your order VAT charge.

How to Cancel VAT Registration

Inform the HMRC a month earlier of changes taking effect if you wish to update the initial VAT required information. Failure may lead to financial penalties. A supervisor must approve certain documents before submission to HMRC for altering your VAT details.

You must complete Cancelling VAT registration a second time a month before the occurrence. Under certain circumstances, a company may be obligated to delete its VAT permanently. The cases include stopping to trade and paying for goods or services.

After the application of VAT registration cancellation, it takes about two weeks for HMRC to confirm approval of your de-registration request and inform you of the official de-registration deadline after submission of the necessary paperwork. However, if the HMRC suspects your UK VAT de-registration isn't warranted, they can re-register you for VAT.

UK VAT Registration Transfer

In case of administration or legal status changes in your business, you may opt to transfer your VAT registration certificate. For example, the VAT registration numbers remain the same if you acquire a company and want to retain its UK VAT number despite transforming from a partnership to a sole proprietorship.

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What are UK VAT Rates?

UK VAT has many responsibilities, so you must collect the required VAT amount from your customers. You can collect the correct VAT amount when you know UK VAT rates. In the UK, there are three types of VAT rates based on a variety of goods and services:

Standard rate: this rate is at 20% and applies to many goods and services
Reduced rates: it's at 5% and applies and applies to a few products like children's car seats and sanitary products
Zero rate: this rate means the products are VAT taxable, but the rate must be 0%. Although the products have zero rates, you must record them in your VAT accounts. These products include motorcycle helmets, newspapers, etc.

Winding Up

As a UK business owner, you must know how to go through the UK VAT registration. From the application process to responsibilities after receiving your VAT number. This will ensure your company complies with tax laws. Whether you're applying online through post, ensuring you understand VAT rates helps you avoid penalties. Additionally, learning about the cancellation and transfer options ensures compliance with HMRC requirements for a smooth VAT experience. Do you want help registering a company in the UK while abroad? Incorpuk is here to help you register a company today. Contact us now and enjoy diverse perks.