HMRC rejected over 50,000 VAT registration requests last year, amounting to 17% of all applications. Some are refused because of suspected connection with VAT fraud, but others are turned down due to mistakes in completing the registration form.

Traders are not helped by the difficulty of getting through to a VAT helpline – the average wait is over 25 minutes and, often when the call is answered the officer cannot deal with the query but only directs the caller to guidance on the HMRC website.

Failure to register for VAT promptly when a business exceeds the £90,000 past or future turnover threshold is likely to result in penalties and hampers trading because the business cannot issue VAT invoices.

Getting it right

One reason for rejecting an application is because HMRC thinks the information given is incorrect. You must ensure that details of the type of business entity, its owners or directors, contact details, HMRC reference number and financial information are accurate and consistent with information HMRC might already have or that is held at Companies House. You have to give details of your bank account, which must be in the name of the business being registered.

Clear expectations

Especially important are a full description of the business activities and the reason you want to register. You must state if you expect regular VAT repayments – HMRC will check your application particularly carefully. Seek our help if you have any doubts.