Understanding the fundamentals of tax in relation to your business is essential in making sure you’re being compliant to HMRC and avoiding potential fines. In this quick guide we’re going to explain what a VAT number is and why it’s important.

We’ll cover:

  • What is a VAT Number?
  • How to get a VAT Number
  • How to find VAT Numbers

What is VAT?

Before we dive into ‘what is a VAT number in the UK’, let’s cover the basics. VAT stands for Value-Added Tax and is a tax that’s added to most products and services sold by VAT-registered businesses.

It is charged on selling, hiring or loaning goods, services and business assets as well as part-exchanges, gifts, commission and even items sold to your staff like meals in a canteen.

When you need to register for VAT

You need to register for VAT if your taxable turnover is more than £85,000 for the last 12 months or you expect it to exceed that in the next 30 days. You also need to register for VAT if you’re based outside the UK and supply goods or services to the UK.

So what does this mean? If you’re VAT registered, you have a number of responsibilities, such as including it (at the correct rate) in the price of all goods and services you sell. You also need to keep records of how much VAT you pay for business costs and expenses, plus any goods you import into the country.

Most importantly, you must report the amounts of VAT charged and paid by sending a VAT return to HMRC. Sometimes you may owe more VAT, if so the HMRC should notify you so you can make the correct payment.

What is a VAT number?

Now we’ve covered VAT let’s move on to answering what is a VAT number? It’s a nine-digit registration number that you get when you register, and it’s important for more than just logging into your Government Gateway account. You should display your VAT number on any invoices, your business website and receipts that you give to customers.

The VAT number is always made up of the letters GB (to indicate that you are in Great Britain), followed by nine numbers. Once you have a number, you’ll need to keep an eye on the quarterly deadlines for your VAT if you file electronically.

How to get a VAT Number?

The only way to get a VAT number is to register for VAT. The easiest way to do this is online through the Government Gateway. You can also choose to hire an accountant to handle all of this for you, who can also submit your VAT returns in the future. Remember, always use an accredited accountant.

If you are an individual or partnership, the information you’ll need to have to hand when registering is your date of birth, National Insurance number, a valid driving licence or passport, bank account details and information about your turnover and the nature of your business.

For limited companies, you’ll need the company name, details of your turnover and the nature of the business, your bank account details, Company Registration Number and Unique Tax Reference number.

Once you have registered you’ll receive your VAT number along with information about setting up your business tax account to help you access the VAT online service. You can start charging VAT and reclaiming it from your ‘effective date of registration’.

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