HMRC has, last week, set out the main reasons why online VAT registration applications submitted by agents are delayed. In such cases a caseworker is required to review the application and usually raise additional queries.
The “Top Five” reasons for delay
If an agent can avoid these, then the chances of a quick and successful registration is enhanced.
- Business verification failed or is not completed
It is important to have all the business details available when completing the application. There can be difficulties when an application is started but set aside while more information is sought. There is only a seven-day limit once the process is underway.
- Same address used for the business and either the applicant’s home address or agent’s address
This is the Principal Place of Business (PPOB) and should be where the day-to-day activities of the business take place. It is not the applicant’s residence (unless the business is run from home) or the agent’s address.
- Bank details provided do not relate to the business
Bank details for VAT repayments must be:
- a UK account
- in the precise name of the business
If the entity is a partnership the account name may be in the name of a partner. If no UK account exists when the application is being made, this can be added later, but thus itself can cause issues.
- ID documents are not provided digitally
These are cases where the applicant has chosen to provide identification documents by post. There is a facility to attach digital ID and this should be used wherever possible to avoid delays. Three items of ID are required: one a photo ID (passport or driving licence) and the other two non-photo documents (utility bills or birth certificates etc).
- Verifying the applicant’s business
This is often when the business belongs overseas or does not yet have an Unique Taxpayer Reference (UTR). Again, it is preferrable to have all this information to hand before the process is started.
Information which an agent needs
- Government Gateway user ID and password for either agent services account or HMRC Online services
- agent’s name
- phone number
- email address
- client’s name
- client’s date of birth
- details of client’s turnover and nature of business
- client’s bank account details
- client’s National Insurance number
- forms of ID from the client
- client’s Corporation Tax Payments, PAYE, Self-Assessment Return, recent payslip or P60
Previously HMRC has commented on delays and set out these additional common errors:
- check that the notification of a trade classification matches the supplies the business makes
- the VAT treatment of activities must be correctly identified
- the correct person must sign the application – eg; for a corporate body it must be a director, company secretary or authorised signatory or an authorised agent
- ensure the correct registration date (effective date of registration – EDR) is given. And that the EDR is accurate considering the circumstances that have been outlined for requesting registration elsewhere in the application
And I will add; do not forget form VAT5L when registering a business which is involved in land and property transactions.