If your business meets the UK VAT threshold, you must pay VAT (20% tax on all sales) and to do so you need to become VAT registered. Once you are all set up and registered on your preferred VAT plan with HMRC, your company will be allocated a VAT registration number.
Below we’ll look at your VAT number in more detail to see what it actually is, how to find it, why your business needs one and how to check if it’s correct.
What is the format of a UK VAT number?
If you are a business owner in the UK, your VAT registration number is a unique identifier that your business receives from the HMRC. The format of the UK VAT number always complies with the following two rules:
- It contains 9 digits
- It starts with the prefix GB
If you work with partners or suppliers in mainland Europe, you may notice that their VAT number looks different. That’s because each EU country has a unique country code and the VAT registration number can have more or fewer digits than the one in the UK. Feel free to check the different formats for each EU member state as confirmed by the HMRC.
How to find a VAT registration number
If you are a first-time business owner, at this point you might be asking yourself: “What is my VAT registration number?” but you might feel embarrassed to ask because it’s something you feel like you should already know. If that’s the case, there’s nothing to worry about! Your VAT number is written on the VAT registration certificate that the HMRC sent you when your VAT application was accepted.
Your VAT number also appears on all your invoices, so you can find it there too.
Looking for someone else’s VAT registration number? The same rule about invoices applies to your suppliers too, so all you need to do to find their VAT number is check any invoice that they have issued for you.
If you can’t see their VAT registration number on their invoice, you should speak to them immediately and request it because it is the key to successfully reclaiming VAT.
Why is the VAT registration number important?
The VAT registration number is an important piece of information that you have to provide to the Government to reclaim the VAT that you have paid to your suppliers. If you don’t have the unique ID for each one of the companies you buy from, whether it’s materials or complete products, your claim may get rejected costing you a lot of money in the process.
You may also be asked by HMRC to provide additional evidence and documentation which would make the usually lengthy list of VAT-related admin tasks even more complicated and time-consuming. To avoid that you should ensure that you have the VAT registration numbers of all your suppliers written down before you fill in the VAT claim application form.
Checking if a VAT number is valid
Another problem you might run into when dealing with a VAT registration number is that it may be rejected as invalid by the authorities. This might happen for a number of reasons, ranging from human error to fraud. So, to make sure that the business you are partnering with is legitimate, it’s important to check whether their VAT registration number is valid. You can do that using one of the following methods:
- For UK business: The HMRC keeps track of all VAT-registered companies, so they can confirm whether a UK VAT registration number is valid. You can contact them online or by phone on their VAT helpline – 0300 200 3700.
- For EU businesses: If your supplier is a European company, contacting the authorities in the country where they are registered may not be so easy. Luckily, the EU has a special database called VIES (VAT Information Exchange System) where you can check the validity of an EU VAT number in seconds.
How to do a manual check
If you would like to have a play around and check a UK VAT number without the help of digital tools or if you are simply curious about the process behind it, here’s how to test a VAT registration number manually:
- In a column, write down the first 7 digits of the VAT number following the prefix
- Each subsequent value should be multiplied by a single, subsequent number from 8 to 2 in a descending order
- Add up all the values of the multiplications above
- Once you have the result of the addition, start deducing 97 from it until you reach a negative number
- That negative number should match the last 2 digits of the VAT number you are testing. If it doesn’t, then the number is invalid
Example: Argos UK lists their VAT number as GB 660 4548 36. The first seven numbers multiplied by the numbers from 8 to 2 are as follows:
6 x 8 = 48
6 x 7 = 42
0 x 6 = 0
4 x 5 = 20
5 x 4 = 20
4 x 3 = 12
8 x 2 = 16
When you add up the results of the multiplication, you get the number 158. Now we begin deducting 97 from it until we get a negative digit:
158 – 97 = 61
61 – 97 = -36
We got -36 and 36 is the number made up of the last 2 digits of the VAT number provided, which means that it is a valid UK VAT registration number.
What to do if a VAT number comes back is invalid?
If you have double-checked that you have entered the correct VAT number seen on an invoice but it still comes back as invalid, you should contact your supplier immediately to get the correct information. If the issue isn’t resolved, you may even need to consider reporting a VAT fraud to the relevant authorities.
If you have been contacted by a partnering business to complain about your VAT registration number coming back as invalid, you should speak to the HMRC VAT helpline (call 0300 200 3700) as soon as possible to find out what the issue may be and rectify the situation.
Also, every time you conduct a VAT registration number check, it is important to make a note of it. If you are using an online system, take a screenshot of the search. If you are calling by phone, log the time and date of the call. This can be used as evidence if the problem needs to be investigated further.
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