How do I find my VAT number?
We love learning new things, and what we love more is sharing that knowledge with you, so you can also show off at work or with your mates - there is nothing to be ashamed of if you don’t know where to find your VAT number and we will cover this and how to register for a VAT below.
And before you say that you are only here to find information about something you thought you should know by now, bear in mind this article is short and sweet, as time is the most valuable asset.
So, what is a VAT number?
A VAT number is a unique identification number that’s assigned to every business registered for VAT. The abbreviation stands for value-added tax - a type of consumption tax which is added to the cost of most goods and services.
In the UK, the standard VAT rate is usually 20% for most goods and services, although there are exceptions from that rule such as reduced rate of 5% and zero-rated VAT only for specific sales.
Who needs to register for VAT invoices?
VAT invoices can only be issued by VAT registered businesses (obvious, right?). So when do you know you are required to register? According to GOV UK you must be VAT registered if your annual turnover exceeds £85,000. Anything below this means a business or individual can voluntarily register for VAT in the expectations to make this amount or to claim VAT business expenses.
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VAT numbers are used for tax purposes and are only given after a business registers. As such, a VAT number is also commonly referred to as a VAT registration number or a VRN.
Why do I need a VAT registration number (VRN)?
The purpose of a VRN is to help identify VAT-registered businesses, assisting you in a variety of different tax-related situations such as VAT returns. You can’t claim something you don’t have the number for!
What happens if you don’t register for VAT? Well, for starters you can face serious penalties and legal repercussions if you fail to register or use an incorrect VAT number. That means that you will suffer unnecessary financial losses, potentially harming your business and your mental health, so the risk is truly not worth it. The second thing is, that once you pay your penalties you will then also need to still pay that VAT on top of what you already own, and this is not a good way to make money.
Understanding how VAT is calculated and when it's charged is critical for businesses to accurately account for their tax liabilities. From the standard rate of 20% to the reduced rate of 5% and zero-rated VAT, it's essential to have a clear understanding of the different rates and when they apply. For instance, businesses need to know when to charge VAT and how to properly account for VAT on their invoices. By doing so, businesses can avoid any potential issues with HMRC and ensure that their tax liabilities are accurately recorded.
Registering for VAT can be a complex and challenging process for businesses. It's essential to understand the different thresholds and exemptions for VAT registration and provide accurate financial information to complete the registration process correctly. Additionally, businesses must understand the importance of VAT registration, as it can impact their ability to recover VAT paid on business expenses. Failing to register for VAT can lead to unnecessary financial losses, and businesses need to prioritize understanding the registration process to avoid any potential issues.
Always check yourself
Using an incorrect VAT number may cause you more headaches that you need down the line, especially when you are trying to claim VAT Returns.
It’s therefore a good idea to double-check that the VAT number is valid and accurate whether you are handling a client’s VAT number or sharing your own invoices.
And to answer your big questions: The easiest and most accurate way to check the VAT number of a UK business is through the UK Government website.
Why does my VAT look different?
Yes, there will be some different VAT number formats and that’s okay! Keep in mind especially if you are working on an international level that the format, length, and structure of VAT numbers vary from country to country.
Within the EU for instance, VAT registration numbers always start with two letters that refer to the country, which are followed by a sequence of numbers.
Similarly, in England, Scotland, and Wales, a VAT number consists of the letters ‘GB’ followed by nine numbers. An example that follows the UK VAT number format could be ‘GB123456789’.
💡 Note that certain sectors and industries may have specific VAT rules and exemptions that business owners need to be aware of. Examples include but are not limited to: healthcare, education, charity and so on - it is best to seek advice from professionals such as your accountant or bookkeeper. If you fail to comply you may face legal trouble so again - not worth it.
For instance, businesses in the healthcare sector need to be aware of VAT exemptions for medical services, while charities need to understand the different rules for VAT recovery. By understanding these unique regulations, businesses can avoid any potential issues with HMRC and ensure that their VAT compliance is up to date.
How do I find my VAT number?
Rest assured that your VAT number won’t get lost. But it’s very important that you quickly know where to find your own or your clients’ in an instant.
Here are some easy options for you:
Once you have already registered and got your letter, you can locate your VAT number on the VAT registration certificate issued by HMRC. As we already covered, your VAT number will contain nine digits, with the first two digits indicating the country code ('GB' for UK businesses).
Another way is to go onto the GOV UK website where you can check a UK VAT number and rest assured that the information provided is correct. You can use their service to check: if a UK VAT registration number is valid as well as the name and address of the business the number is registered to.
Since Timworks is designed to make life easier for both accountants and their clients, you get the option to store company numbers (such as VAT) safely on the app, so you can find it with a single click.
How to register for a VAT number
Start by first determining whether or not you actually need to be VAT registered, before you panic. Only businesses with an annual turnover exceeding £85,000 must register for VAT. What if you don’t know if you’d exceed that? Once you get close you can still register or even if you have a turnover below this threshold can still choose to register voluntarily.
Follow the steps below to register for VAT:
Gather the necessary information: Start with the obvious basics, such as your business details, financial information, and company number. You'll also need to decide on the accounting period that you want to use for VAT purposes.
Register for VAT: You can register for VAT online through the HMRC website. Alternatively, if you are not a fan of laptops you can register by post or phone but it may be a lengthier process. The registration process may vary depending on your business type and structure, so it's important to read the instructions carefully.
Patiently wait for your VAT registration certificate: Once you've registered for VAT, HMRC will send you a VAT registration certificate, which contains both your VAT number and the date of registration. This certificate is important and should be kept in a safe place alongside your other documents.
Ensure you are charging and paying VAT: After you've received your VAT registration certificate, you can start charging VAT on your goods and services. You'll also need to start paying VAT to HMRC on a regular basis, based on the accounting period you chose during registration.
Overall, registering for VAT can be a complex process, and it's important to ensure that you understand the rules and requirements. If you're unsure about any aspect of VAT registration, it's always a good idea to seek professional advice from your accountant or consult with HMRC directly.
