The unexpected pitfalls of on-line VAT registration
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Published 25th January 2010
The
VATman has happily encouraged businesses to use his on-line VAT registration
services as it is, according to him, faster and more efficient. In reality the
main saving is only the time it takes to post the form to him. Under the
original on-line application process a number of automatic checks were carried
out that speeded up the processing. But when they introduced the new paper form
a couple of years ago they had to change the on-line system as it was not
compatible with the new paper form and these checks are no-longer untaken. The
VATman simply prints the form off and puts it in the pile with all the paper
applications for manual processing.
Like
a lot the Governments on-line services all is not what it seems and the
perceived advantages do not really exist. The recent experiences of one of our
subscribers highlighted an unbelievable flaw is the system.
Our
subscriber wanted to register his new business for VAT and decided to try the
on-line registration service as it was supposed to quicker than completing the
paper VAT 1. The VATman says that over 70% of registration applications are
completed within their 13 day deadline so he confidently expected to get his VAT
number within two weeks.
One
point that the VATman failed to point out was that as he was registering a
limited company they needed a copy of the Certificate of Incorporation before
they can complete the VAT registration. But you cannot scan documents and
submit them with the form. So the VATman prints off the on-line form that you
have completed and puts it in the pile with all the paper application and when
he gets round to processing it he sees that he needs a copy of your Certificate
of Incorporation and writes to you asking for it. In our subscribers case the
letter was not even sent out until day 15 (2 days after the target for
completing the application) and three weeks after applying for VAT registration
he had still not been issued with a VAT number.
To
add insult to injury the VATmans website states that to register a partnership
you need to complete a VAT 2, which you can’t do on-line.
Tip.
The only advantage in applying on-line is, therefore, for sole proprietor
businesses. In the case of partnership the application cannot be completed
on-line and for limited companies it is quicker to make a paper application and
enclose the Certificate of Incorporation so that the VATman won’t need to ask
for it later and slow down the whole registration process.
To download the VAT 1
registration form go to: http://search2.hmrc.gov.uk/kbroker/hmrc/forms/viewform.jsp?formId=986
Andrew Needham is a Director of VAT Specialists Limited,
headed by Chartered Tax Adviser Andrew Needham who has a degree in Law from UCNW
Bangor and is a specialist in indirect taxes. Andrew has over 20 years
experience in VAT having spent 7 years in HM Customs & Excise, firstly as a VAT
inspector, then as a departmental trainer, and finally in a headquarters policy
unit dealing with the introduction of the EU single market.
VAT Specialists Limited, 31 Bisham Park, Runcorn, Cheshire WA7 1XH.
(E) Andrew Needham BA CTA
(T) 01928 571207
(F) 01928 571202
(M) 07810 433 926
(W) www.vatspecialists.net
