When conducting business, it’s essential to verify whether the companies you’re dealing with are VAT registered. This verification ensures that any Value Added Tax (VAT) you pay is legitimate and that your business remains compliant with tax regulations. Additionally, if you’re VAT-registered yourself, confirming a company’s VAT status allows you to reclaim VAT on business expenses.

In this guide, we’ll explore the importance of checking VAT registration, how to verify a company’s VAT number, and the implications for your business, with a particular focus on how CANGAF Accountants can assist you in this process.

What Is VAT Registration?

VAT registration refers to the process by which businesses register with HM Revenue and Customs (HMRC) when their taxable turnover exceeds the VAT threshold. In the UK, this threshold currently stands at £85,000 per year. Once registered, businesses are required to charge VAT on most goods and services they sell and are also able to reclaim VAT on qualifying business purchases.

A VAT-registered business will be issued with a VAT registration number, a unique identifier used when reporting VAT to HMRC. If you’re doing business with a company that claims to be VAT-registered, it’s crucial to verify that this is the case. This ensures the VAT you’re paying is legitimate and that you can reclaim VAT if you’re eligible.

Why Is It Important to Check if a Company Is VAT Registered?

There are several reasons why you should always check a company’s VAT registration status:

1. Reclaim VAT on Business Purchases

If your business is VAT-registered, you have the right to reclaim VAT on purchases made from other VAT-registered businesses. However, you can only reclaim VAT if the business you’re buying from is legitimately registered for VAT. Verifying the company’s VAT number ensures that you’re reclaiming VAT correctly.

2. Avoid VAT Fraud

Unfortunately, some companies may fraudulently charge VAT without being registered. By checking whether a company is genuinely VAT-registered, you can avoid being charged VAT illegally. VAT fraud is a serious crime, and paying VAT to unregistered companies can lead to complications for your business when trying to reclaim VAT or during a tax audit.

3. Tax Compliance

Properly accounting for VAT is a key aspect of business tax compliance. Ensuring that the companies you transact with are VAT-registered helps you stay compliant with UK VAT laws and avoid issues with HMRC down the line.

4. Build Trust in Business Relationships

VAT registration often signifies that a business is established and trustworthy. Verifying a company’s VAT registration not only protects your financial interests but also helps you build reliable business relationships.

How to Check if a Company Is VAT Registered

There are several ways to check if a company is VAT registered:

1. Request the Company’s VAT Registration Number

One of the easiest ways to verify a company’s VAT status is to ask them directly for their VAT registration number. VAT-registered businesses are legally required to provide this number on all invoices and receipts. Once you have the number, you can verify it using the methods outlined below.

2. Use the HMRC VAT Checker

HMRC provides an online service to check the validity of VAT numbers. This tool allows you to verify whether a VAT registration number is valid and check the details of the business.

To use the HMRC VAT checker:

• Visit the official HMRC VAT number checker.
• Enter the company’s VAT registration number.
• The system will confirm whether the number is valid and provide details about the company, such as its name and address.

3. VAT Information Exchange System (VIES) for European Businesses

If you’re dealing with a company based in another European Union (EU) member state, you can use the VAT Information Exchange System (VIES). VIES allows you to verify the VAT registration numbers of businesses operating within the EU.

To use VIES:

• Visit the VIES website.
• Select the relevant country and input the company’s VAT number.
• The system will tell you if the number is valid and provide company details.

4. Check the Company’s Invoices and Documents

All VAT-registered businesses are required by law to include their VAT registration number on invoices, receipts, and other official documentation. When conducting business with a new company, ensure that the VAT number is present on any invoices you receive.

5. Contact HMRC Directly

If you’re unable to confirm a company’s VAT registration through the methods above, you can contact HMRC for assistance. HMRC can verify VAT registration numbers and provide further guidance on VAT compliance.

What Happens If a VAT Number Is Invalid?

If you find that a company’s VAT registration number is invalid, or they are charging VAT without being registered, there are several steps you should take:

1. Contact the Company: Inform the company that their VAT number appears to be invalid and ask for clarification. There may be a genuine error or a misunderstanding that can be resolved.
2. Report the Issue to HMRC: If you believe a company is fraudulently charging VAT without being registered, you should report the issue to HMRC. Fraudulently charging VAT is illegal and can result in penalties for the company.
3. Do Not Pay VAT: If the company is not VAT-registered, they are not allowed to charge VAT. Ensure that you do not pay VAT to businesses that cannot provide a valid VAT registration number.

How CANGAF Accountants Can Assist You

Navigating the complexities of VAT can be challenging, particularly for small and medium-sized businesses. At CANGAF Accountants, we specialize in helping businesses manage their VAT compliance and avoid issues with HMRC. Whether you need assistance with verifying VAT numbers, reclaiming VAT, or managing your VAT returns, our experienced team is here to help.

By working with CANGAF Accountants, you can ensure that your business remains fully compliant with VAT regulations, minimizing the risk of penalties or audits.

Contact CANGAF Accountants

If you have questions about VAT registration or any other business tax issues, get in touch with us today.

• Address: 235 Tonge Moor Road, Bolton BL2 2HR
• Email: info@cangafltd.com
• Phone: 01204 859315

Conclusion

Checking if a company is VAT registered is a crucial step in ensuring that your business transactions are legitimate and compliant with UK tax laws. By using the HMRC VAT checker or asking for a company’s VAT registration number, you can verify whether VAT charges are lawful and ensure that you can reclaim VAT where appropriate.

If you need help managing VAT or understanding your tax obligations, contact CANGAF Accountants today. Our expert team can provide the guidance and support you need to keep your business running smoothly while remaining compliant with UK tax regulations.