Wondering how you can find out if a company is VAT registered or not? Then you’ll want to read out guide below.
About VAT Registration Numbers
A VAT registration number, or VAT number, is a number issued by HMRC to organisations that have registered for VAT.
It consists of nine digits, as well as a two-letter country code to indicate in which country a company has been registered. For example, it would be GB in the United Kingdom.
By understanding what a UK VAT number looks like, you will be able to determine whether the numbers are legitimate.
Just take note, VAT numbers vary between countries. Businesses registered for VAT in EU member states will have a different VAT registration number format, as well as a different country code.
Value Added Tax is also known by different terms across the world. Sometimes it is simply called sales tax or Goods and Services Tax (GST).
The Importance of Knowing if a Business is VAT Registered
Customers doing business with suppliers in the UK need to know whether the company is registered for VAT because:
- VAT has an influence on the price of goods and services. An extra 20% can be added to products or services, as this is what the supplier pays the government.
- Registered businesses must issue a valid VAT invoice to their customers. The VAT invoice should include specific required information, including details of the company and customer, the company’s VAT number and the VAT rate charged.
- Only businesses that are registered for VAT can reclaim VAT that was paid on any business expenses.
Are all companies VAT registered?
Not all companies have to have a VAT number. There are certain exceptions:
- The total taxable turnover is less than the VAT thresholds.
- The company does not provide any taxable goods or services.
- The business is VAT exempt.
- The business sector is not subject to VAT.
How to Check the VAT Status of a Company
If a customer or another business is dealing with a new supplier, there are two ways to check if the VAT registration number that has been supplied is valid, or if the company is registered at all.
First, a customer can call the HMRC VAT Helpline or get in contact with the HMRC to verify the legitimacy of the company. Second, the online VAT Information Exchange System (VIES), managed by the European Commission, can be used.
1. Contacting the HMRC
One of the easiest ways to check VAT status is to call the HRMC’s helpline on 0300 200 3700. Calls can be made from 8 am to 8 pm on weekdays.
The HMRC has a database of every VAT-registered business, making it easy for customers to check the status and also verify whether a VAT number is legitimate.
The HMRC’s online tool can also be used to check UK VAT numbers.
The limitation to contacting the HMRC is that the database only includes UK businesses’ information.
Customers dealing with companies outside of the UK should check the country’s system for validating VAT status.
2. Use the VAT Information Exchange System (VIES)
The VIES is an online service that enables businesses to check whether their suppliers are registered for VAT.
The service is easy to use and quickly provides up-to-date information on the VAT status of a company.
To use the VIES, customers must register online to open an account on the VIES website. The website describes how easy it is to use once logged in: “You can verify the validity of a VAT number issued by any Member State / Northern Ireland by selecting that Member State / Northern Ireland from the drop-down menu provided, and entering the number to be validated.”
It’s important to check whether VAT-registered businesses are legitimate, especially if the customers themselves pay VAT and want to reclaim VAT.
Checking a company’s VAT number can be done by contacting the HMRC or using the online VAT Information Exchange System.
However, this can take up a lot of time that could be spent elsewhere in managing a company. It would be beneficial to hire an accountant to help validate a supplier’s VAT number or check whether a company is VAT registered.