What do you do if you need a VAT registration but you can’t get one? I was thinking all of this through after reading that HMRC have admitted that they do in fact have significant delays in processing that registrations – see this from the CIOT. We have been told recently that they were still processing October applications which for some will be causing significant commercial and financial issues. So what to do if you have a Delayed VAT number – you need one but just can’t get one?
What to do if you find yourself in the situation? Clearly life and business needs to go on and, unfortunately, the only way that can happen will involve a degree of double tracking.
You have the situation where you know you are going to be registered from a particular date but yet VAT law does not allow you to charge or show VAT on your invoices until you actually get your VAT number. Nevertheless HMRC will expect you to pay VAT on the supplies made in the meantime. You’re going feel caught between the devil and the deep blue sea.
The only thing you can do is adjust prices to allow for the eventual VAT amount payable on the supply and tell customers that you can’t give them a VAT invoice until the VAT number has been confirmed. Normally this only involves an overlap of a week or two but right now that wait could easily be months so customers could well be unhappy about paying an amount that will become VAT but yet they can’t claim the payment until they get an invoice.
Once the VAT number is confirmed then you can raise an invoice showing the amount as VAT but not a minute before then. It really is very important to not add an amount to an invoice and call it VAT because that’s fraud and you certainly don’t want to make a bad situation worse.
On this topic of processing times and delayed VAT numbers – is it me or is it something close to amusing that HMRC are looking at how they can “improve the registration process by resolving more cases in real time by telephone and engaging with customers…” Imagine such a thing as picking up the phone to ask questions and get the job done… Cynic? moi?
As ever, please get in touch if there is anything we can do to help.