How to Obtain a VAT number in the UK

The VAT number is an identifier that HMRC assigns to all companies that register for that tax. This element will not only be necessary to make tax returns but will also allow a business to access certain fiscal benefits. Therefore, in this article I explain why and how to obtain the VAT number in the UK.

What is a VAT Number?

VAT (Value Added Tax) is a tax that levies consumption of the final customer of the production and sales chain and is like other taxes from neighbouring countries, such as Spanish IVA. Thus, companies that sell these products and services will collect this duty in place of the public administration. Depending on the product, they will apply some fees or others. An extra 20% will be charged over most goods and services’ price, a 5% to health and energetic products and a 0% to the majority of food and books. In this article, you can find more information about VAT in the UK.

For the competent authorities to verify that a corporation has made its returns, they will need an identifying element. This is the function of the VAT number. It is a unique alphanumeric code that every business that registers individually in VAT has. The enterprises obtain it after completing the registration process into the British VAT.

In the UK, its structure is similar to that of other European countries. For England, Wales and Scotland, they will use the letters GB along with 9 numbers. In Northern Ireland, on the other hand, they replace GB by XI and the 9 figures remain.

Why Should You Obtain a VAT number in the UK?

The Company Exceeds the Maximum Income Threshold

If a company exceeds 90 000 GBP of income over a fiscal year, it must register into VAT and declare the money that it has gathered as VAT to His Majesty’s Revenue and Customs (HMRC). On a quarterly basis, corporations will have to make such returns, which must be accompanied by the business’ VAT number. It is necessary that they provide it so that the HMRC can confirm that the company has fulfilled its obligations under this levy.

VAT Deductions

As I previously mentioned, VAT is designed in a way in which the final consumer of the production and sales chain pays it. Consequently, if a business has registered into VAT, they may deduct the money which corresponds to business expenses. However, to be eligible for these fiscal reductions, you will have to file certain documentation. They must prove that these outlays, such as bills or annual accounts.

Exports of Goods

If a company exports products to other countries, it is very likely that tax regulators in those regions require it to have a VAT number. This is especially common in European Union states.

How Can You Obtain a VAT number in the UK?

To get this identifier, a company must register into VAT. The first step will be to gather several documents, which include:

The Companies House registration data of the enterprise (sole traders and the members of a partnership must provide their National Insurance number).
The UTR number of the business.
The data of the commercial bank account of the corporation.
The annual accounts and an estimation of the taxable income of the last fiscal year.

Once you have these files, the company can go through the process of registering for VAT. There are two ways to do it: online or by mail. The internet way is more recommended, as it will be faster. Nonetheless, there are certain cases in which it is required to complete the registration through mail. In this link you can check these instances.

After completing this procedure, the VAT number will be sent to you within two weeks along with information on how to set up your tax account with the HMRC or when to file your first VAT return.

In ukstartcompany, you will find information about how to establish, register and operate companies with different legal structures and business activities in the UK.