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VAT registration goes online only

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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. 

16th Oct 2023
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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.”

Going digital

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. 

This move comes hot on the heels of HMRC’s decision earlier this year to make paper self assessment tax returns request only - before the tax authority rowed back on that decision a week later. 

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."

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Replies (19)

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Morph
By kevinringer
16th Oct 2023 09:38

"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”"

I had always thought the word "options" meant that something was optional. Silly me, I should have realised that in HMRC-speak "options" means "compulsory".

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Replying to kevinringer:
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By Neil Mackay
16th Oct 2023 11:59

To paraphrase Benny F - "the only things compulsory in life is to be bored to death trying to deal with an incomptetent tax authority", or something like that.

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Morph
By kevinringer
16th Oct 2023 09:39

Maybe we should all download the PDF VAT1 from https://www.gov.uk/guidance/register-for-vat and save it for future use.

Thanks (5)
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By agknight
16th Oct 2023 09:47

From something like a three day application to issue of vat number turnaround, it now takes weeks. It beats me why HMRC don't let the applicant in with a low hurdle, and check later.

Putting in a requirement for a UTR, which also takes time, just pushes Vat registration back further.

HMRC need a complete volte-face to their approach. 'What would be the best service for the taxpayer and how can we accommodate it.' I know it will never happen.

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Replying to agknight:
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By Neil Mackay
16th Oct 2023 10:37

We used to be able to phone them at 4:30 in the afternoon and get a VAT number in our in-box when we got into the office the next morning!

What they need to do is properly alpha test their strategies before assuming whatever they do is correct and unleash it without even a beta test!

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Replying to agknight:
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By FayeBK
27th Oct 2023 14:24

Submitted one yesterday and it says "you will hear from us within the next 40 WORKING days"... potentially 2 months to get a VAT number?! Insanity.

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Replying to FayeBK:
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By Neil Mackay
27th Oct 2023 16:02

You will hear from them within 40 working days.

Unfortunately the person who will handle your application has just gone off on maternity leave and will return in 9 months, she will be returning on 27 July 2024 on a staggered return, 2 days a week for the first 3 months, then 4 days a week from then on. Back of an envelope calculation that's 23 November next year. But please make sure you remain fully compliant, or else.

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By petestar1969
16th Oct 2023 09:54

This makes perfect sense to me. I fail to see how any business needing to register for VAT could be digitally-excluded when pretty much everyone is on the internet.... How would such a business function at all?

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Replying to petestar1969:
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By Neil Mackay
16th Oct 2023 10:01

And that, unfortunately is HMRC's mind-set. "pretty much everyone" is not everyone.

Thanks (5)
Replying to petestar1969:
Morph
By kevinringer
16th Oct 2023 10:19

I have plenty of farming and building clients who do nothing digitally and don't even have an email address, yet they run successful businesses which make good profits.

Thanks (5)
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By Neil Mackay
16th Oct 2023 09:57

Would HMRC's time not be better spent getting their house in order, before they dismantle the foundations?

Their continued excuses around why they are not doing an adequate job is quite frankly laughable - "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. "

That is obviously not the case, after waiting almost 3 months for a response to an online VAT registration application (with 3 x Progress chasing - 40 days plus emails sent to them) I get an email asking for an NI and UTR ! BOTH OF WHICH ARE ON A PAPER VAT1 FORM!!!!!!!!! And I'm pretty sure it's on their broken online system as well.

I sent them as polite a response as I could -

"What a useless lot you are, I applied on 4 July 2023 and sent 3 chaser emails, all a week apart more than 40 days after applying and now 3 weeks after you received the last of those you ask for information that was given or should have been asked for on the application. On top of that you give me a 2 week deadline to reply.

Just as well I've reconsidered my application, so you can go back to twiddling your thumbs."

Within a week I had a PAPER response thanking me for informing them that I no longer wanted to be VAT registered but have no hesitation in contacting them should I need further assistance.

I might just use the near 3 months as a yard-stick for how I answer their future queries. Wouldn't want to bog them down with instant answers.

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By Crouchy
16th Oct 2023 10:01

busiesses??

SSack the editor!! ;)

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Replying to Crouchy:
Morph
By kevinringer
16th Oct 2023 10:21

He shud uz the spel cheker moor.

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By ralan
16th Oct 2023 10:42

If the online system worked then fine, last 2 online applications i tried both failed and had to submit paper application.

Poor or no testing of the system as usual

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Chris M
By mr. mischief
17th Oct 2023 09:45

The last 2 VAT applications I did took HMRC well over 2 months to action. In both cases all they were achieving was the delay of money to the Treasury. Currently my latest employer registration has now taken over 3 weeks, the first payrun has been done and the staff have all been paid. PAYE and NI has been deducted - under dummy references which I will change to the real ones when I finally get them. Again, all HMRC are achieving is to delay the payment of PAYE and NI to the Treasury.

Maybe we should write to the Treasury to explain how the incompetent way HMRC is run is leading to the country paying extra interest on the National Debt?

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Replying to mr. mischief:
Ivor Windybottom
By Ivor Windybottom
17th Oct 2023 12:30

This is especially relevant as HM Govt use a cash basis for their accounts, I believe, so they cannot count tax receipts until actually received.

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By I'msorryIhaven'taclue
14th Nov 2023 17:00

https://webarchive.nationalarchives.gov.uk/ukgwa/20210213025119/https://...

From there You can click to the December 2020 VAT1, which is substantially the same as the latest Sept 2023 VAT1 form. Presumably that site will be updated for the 9/23 VAT1 form soon.

12/20 VAT1
https://webarchive.nationalarchives.gov.uk/ukgwa/20210213025119mp_/https...

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GNS Associates
By GNS Associates
20th Nov 2023 08:09

Good to see HMRC taking steps with caution in making tax digital. Cheers.

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Affotax(Reliable Accounting FIrm)
By affotax
07th Feb 2024 06:21

Affotax offers efficient and hassle-free UK VAT registration services online, ensuring compliance with UK tax regulations.
If you are UK residents you can avail this service online.
https://affotax.com/vat-registration

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