VAT registration goes online onlyby
HMRC is set to remove the paper VAT registration form from mid-November as the tax authority pushes businesses and agents to use online services to apply for VAT registration instead.
From 13 November, businesses and agents will have to go online to register for VAT unless they're digitally excluded or unable to use the VAT registration service. Those needing to use VAT1 to apply for VAT registration will instead have to call the VAT helpline to request a paper form.
HMRC justified the digital by default approach in a recent Agent Update, noting that over 95% of businesses or agents already use the online VAT registration service rather than opting for the paper alternative.
Quicker, easier and more secure
The tax authority has removed the form from GOV.UK as part of its efforts to accelerate the VAT application process and offer a “quicker, easier and more secure” registration service.
“Most customers are digitally able and many report a better experience when using digital channels — accessing their information at a time and place that suits them,” HMRC noted in the Agent Update.
Only digitally excluded taxpayers or certain businesses where the online VAT registration service cannot be used will be able to use the VAT1 form. These businesses will need to contact HMRC’s VAT helpline to ask for a VAT1 firm. HMRC may then ask these businesses to explain to the tax department why they want to use the postal option.
Aside from the digitally excluded, there are other businesses that currently cannot use the online service, including those applying for a registration exception, those joining agricultural flat rate schemes and online partnerships, and entities without a UTR.
More headaches without a UTR
Meanwhile, VAT expert Linda Skilbeck flagged on the social platform X, formerly Twitter, concerns about the announcement: “HMRC Agent Update 112 sets out that some 'specific types of registration' will continue to need to use the slower paper VAT1 route, but unhelpfully they don't say which types! If you don't have a UTR you cannot finalise an online application, but presumably HMRC are happy to let people waste time finding out by trying!
“After 1 November excluded businesses will have to ask for a VAT1 by ringing the helpline, which adds additional headache. And if you are already registered but apply to form a new VAT group you need to fill in a new VAT1 if you are going to be the group representative member.
“So you can have a situation where a business that has never had a UTR but has been VAT registered for years, is suddenly unable, due to the new requirement, to be the rep member of a new VAT group. Additionally even if you are an entity which does qualify for a UTR there can be a wait for them to be issued, which in some circumstances (eg a transfer of a going concern) can mean the VAT registration cannot be completed by the date required in VAT legislation.”
HMRC explained that the move to the online VAT registration service is driven by a need to offer “greater digital options to give customers the experience they expect from a modern tax authority” and moving online “aligns with HMRC’s ambition to increase the use of digital channels including Making Tax Digital”.
However, the transition to fully digitalising VAT registration has faced some hurdles along the way. In May of this year, HMRC announced the sudden closure of the VAT registration helpline, and advised agents and taxpayers to use the ‘Where’s my reply?’ online service instead to check the progress of their application.
HMRC noted at the time that the closure of the helpline would free staff from answering the phone to instead use that time to process applications.
HMRC’s move to ‘digital by default’ stepped up this year with the news in April that online submission of P11Ds and P11D(b)s was mandatory this year, and the paper version of the capital gains tax on property disposal return was revived in online form after a long campaign from the Association of Tax Technicians.
Editor - This article was amended on 18 October after HMRC confirmed that you do not need a UTR to register online. An HMRC spokesperson said: "If you have a UTR you must use that to register, but if you don't we have other identifiers that can be used."