Number of VAT registered companies drops

Is this something you've noticed?

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Hi folks,

Hope you're all having a nice week. Last week, VATCalc revealed that there has been a drop of 40,000 VAT and PAYE-registered businesses in the UK, the first drop since 2011. Small traders were the hardest hit demographic, with the decrease believed to be due to cost-of-living pressures and post-COVID crisis insolvencies.

It seems that things are things are getting pretty tight for UK businesses. In light of this, have you noticed a drop in registrations amongst your trader clients and have your smaller businesses felt the cost of living pinch?

The industries most affected were transport, IT and the sciences, while the arts and the property sector offered a more optimistic picture - is this something you've encountered recently?

Let us know in the comments below and have a great rest of the week. 

Replies (10)

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By Justin Bryant
03rd Oct 2023 13:12

Maybe HMRC have just recently woken up and deregistered all the fraudulently registered ones.
https://www.accountingweb.co.uk/any-answers/hmrc-this-is-quite-shocking-0

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By ireallyshouldknowthisbut
03rd Oct 2023 13:17

Quite frankly I would have 2 more registered if HMRC were not so inept and messed up the registration process so badly.

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By rmillaree
03rd Oct 2023 13:20

Perhaps teh IR35/agency rules are biting - i think i have seen a dropoff in on eman band contractors.

One other item is its nightmare getting vat number nowadays - so i wander if there is material amount missing that should be vat registered but cant get a vat number off the vat office !! - one plus point of being more picky about dishing oiut vat numbers is that you would hope there are less fake/scammy vat numbers out there where its just a tool to ripoff the government by pocketing vat and not paying over?

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Replying to rmillaree:
By petersaxton
03rd Oct 2023 16:12

It's not an easy job giving out a VAT number. You have to get the right number of digits for as start.

OK, I know there's more to it than that!

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Intercity
By Mr Hankey
03rd Oct 2023 14:52

Well yes, they do seem to be spending money on cracking down on fraud.

They are currently recruiting for a higher technical surveillance officer, the duties of which include "property interference and other intrusive techniques" which I think sounds rather interesting!

Source: job reference 313662 at www.civilservicejobs.service.gov.uk

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Replying to Mr Hankey:
paddle steamer
By DJKL
03rd Oct 2023 15:40

Sounds like they want Watergate plumbers.

Here is the recruitment process.

https://www.youtube.com/watch?v=ytJCuLh82cU

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VAT
By Jason Croke
03rd Oct 2023 14:54

In part, I suspect the fall is partially down to HMRC increasing their fraud prevention measures. The UK VAT system was targeted by overseas businesses with the sole purpose to defraud HMRC and also to fool Amazon into letting overseas traders trade on the Amazon platform.

Partially down to those very same anti-fraud measures, the speed at which HMRC are issuing VAT numbers has been very slow, there must be a backlog of VAT registrations that have not yet been processed which wouldn't have been included in the statistics.

Partially down to MTD, because HMRC want every VAT registered business to pay a monthly (and regularly increasing) fee to a third party software supplier, simply to file a VAT return. Might as well stay under the threshold and have a happier life.

Finally, yes, the economic situation isn't brilliant at the present time but that's not to say the SME sector is shrinking or tanking. I'd suggest there is something else going in behind those statistics.

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VAT
By Jason Croke
03rd Oct 2023 14:55

Will Cole wrote:

Hi folks,

IThe industries most affected were transport, IT and the sciences, while the arts and the property sector offered a more optimistic picture - is this something you've encountered recently?

Let us know in the comments below and have a great rest of the week. 

What doesn't surprise me is that IT sectors are not registering for VAT.

This is because IT consultants seem to think VAT and Accounting advice is easy and should be given away for free and there is no need to register for VAT as they've used Google or ChatGPT and it says you don't need to :) :)

*not my genuine opinion, just a little in-joke between the Any Answer regulars.

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paddle steamer
By DJKL
03rd Oct 2023 15:09

Could be part of the work/life balance viewpoint, work less, enjoy life more, earning more money not as important as it was.

I asked my daughter last night (Age 29) that if she was offered three out of undernoted 6 by her employer , which would she take:

Higher Salary
Bonuses
Higher Employer Pension Contibutions
Pack up work at 2.30 on a Friday
Work social events/outings throughout year
Twice a year face to face meetings discussing work outcomes, career pathways etc
(Inspired by another thread on A Web yesterday)

Now I know if you asked me this at age 29 it would have been money, money, money, but in her case it was Salary, Pension, 2.30 on Friday. (A balanced view)

So perhaps "Greed is Good "is now slightly subdued. (Mind you I saw little sign of this with her brother when he was contracting, he set up his company, vat registration, few holidays as possible taken(When forced to not work he just moped about lost income) , earn as much as possible and salt it into bank then extract as efficiently as possible)

Or maybe there are two tiers- those who can earn over £100k scrabbling for more, as the reward per hour is worthwhile, those earning much less per hour valuing their leisure time far more?

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By Justin Bryant
04th Oct 2023 12:46

It's nothing to do with the London steakhouse or Chinese restaurant economy, that's for sure. I called some steakhouses last night to book next Saturday evening for 8 people and once they had stopped laughing they told me politely that 14th October is fully booked. In fact, I looked up every steakhouse in the locality as well as Chinese restaurants on opentable and guess what? No hay nada por ocho personas.

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