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The unexpected pitfalls of on-line VAT registration


Andrew Needham - Expert Author

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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:

About the Author

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

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Article Published/Sorted/Amended on Scopulus 2010-01-26 11:18:30 in Tax Articles

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