VAT Registration – A Time Consuming Process

Posted by ntagg on Tue, 27/10/2009 - 09:33 in Blogs 3730 1 comment | report

As an agent, you become very used to the process of registering a business for VAT and identifying clients who may appear ‘high risk’ in the eyes of the HMRC registration unit. However recently my experience, like a number of other agents I have spoken with, appears to be that HMRC are asking for further information more and more. As a result, the time to complete a VAT registration from start to finish is now more a matter of months than weeks.

HMRC has have always pointed to the levels of VAT fraud that take place and as a profession I think we appreciate that one of HMRC’s roles must be to minimise the loss resulting from this criminal activity. As such, HMRC often ask for further information to support the initial application.

Over the last few months, we have seen a large proportion of applications made on behalf of our clients resulting in the familiar ‘further information’ letter from HMRC. Increasingly this is for clients operating in industries not previously considered to be ‘high risk’. As legitimate businesses they don’t mind providing this information, however the delay caused often results in further difficulties for the business whilst in this period of limbo.

If the level of risk assessment has changed, then perhaps HMRC should think about increasing the amount of information that needs to be provided right from the start. Whilst I am not a fan of excess red tape, it must be preferable to provide more information on the initial application rather than face the delays and additional effort required to respond to HMRC’s additional queries.

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HMRC and VAT Applications

arnoldbrewer | Wed, 28/10/2009 - 12:43 | Permalink

I certainly agree this is becoming a problem- having only yesterday filled in and sent off a further information request and having in the past a Registration refused because the client wanted the returns sent to his adress in France - in fact a situation accomodated through a VAT office in Aberdeen but apparently unknown to the registration unit - they really should meet up !!

Surely an easy and quick way forward is the issue on application of a temporary VAT number - it could be the real one with a "T" suffix that could be withdrawn if all the needed information is not provided within say 3 months?

I reckon that is the way forward - we really do not need yet more questions on the initial application.

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Tax Matters

Nick Tagg is a Director of Taxation Services at Wisteria Chartered Accountants, Tax & Business Advisors, based in North London. He overseas all tax compliance and advisory matters, dealing with personal taxes, corporation tax, employment taxes and VAT. Nick is a chartered tax adviser and member of the Association of Tax Technicians.

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