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VAT Voice by Steve Allen

Steve Allen, Director of VAT Solutions (UK) Ltd outlines the importance to traders of obtaining valid VAT numbers from suppliers and customers.When you are trading with other businesses there are certain circumstances when it is important to get their VAT numbers and make sure they are valid, both for customers and suppliers.

Customers

If you are selling goods to customers in other member states of the EU it is important that you obtain their VAT registration number. Without it you will be unable to zero-rate your supply to them. When you have obtained the VAT number you should quote it on your sales invoice. It is one of the things that Customs check when they visit. If you have not obtained the VAT number, they will assess you for the VAT that should have been charged. If you have obtained a VAT number from the customer, but have any doubts about its validity, you can now check it by contacting Customs National Advice Service on 08450 109000 or by accessing http://europa.eu.int/comm/taxation_customs/databases/vies_en.htm

If you have quoted an invalid VAT number on your sales invoice, and have not “taken reasonable steps” to check its validity, Customs can also assess you for the VAT that should have been charged.

You will also need the VAT number to show on your EC Sales Lists (VAT 101).

Suppliers

It is important to make sure that your suppliers are properly VAT registered, otherwise any ‘VAT’ that you have been charged may be disallowed by Customs. Occasionally, you may come across a supplier that is not registered for VAT, but charges VAT on its sales invoices, and uses a made up or redundant VAT number, or one that is proper to another business. They will only be doing this to defraud Customs, but it is increasingly common. Customs may check the validity of the VAT number on purchase invoices, and if it is not valid, they will probably disallow the claim for input VAT.

You can check the validity of a VAT number by contacting Customs National Advice Services or by accessing their website at:
http://www.hmce.gov.uk/vat_search/index.html

Tip 1

Even if the supplier quotes a spurious VAT number on its invoice, by concession, Customs may allow you to claim the input VAT if they are satisfied that:

- the recipient of the supply is neither involved in nor has close knowledge of the supplier’s business;

- it was reasonable for the recipient to consider that he had been lawfully charged VAT; and

- the claim is made in respect of goods and services genuinely supplied at the stated value.

In other words, if he is satisfied that you are not involved in any fraud.

Tip 2

If a supplier is not VAT registered but should be, any VAT you have been charged is recoverable.

Steve Allen
Director, VAT Solutions (UK) Ltd
Email: steveallen@vatsolutions-uk.com

VAT Solutions (UK) Ltd
11 Winmarleigh Street,
Warrington,
WA1 1NB

(T) 01925 242497
(F) 01925 242498
(M) 07810 433927
(W) www.vatsolutions-uk.com

VAT Solutions (UK) Limited is an established independent firm of Chartered Tax Advisers, formed by Andrew Needham and Steve Allen. The company has a cross-section of clients from multi-national companies through to medium-sized and numerous smaller regional firms of accountants and solicitors. They produce a regular publication 'VAT Voice', which can be downloaded directly from the Internet via the following address: www.vatsolutions-uk.com/newsletter.doc