01 Aug 2017
August 1, 2017

Checking VAT Registration Numbers

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If you are doing your bookkeeping for a VAT registered company then you can usually reclaim any VAT you pay to your suppliers through your VAT return (subject to your particular industry and rules, it is not automatically the case).  However, if your supplier is not VAT registered in the UK then there is no UK VAT to reclaim.  This is a mistake often made by business owners who see an invoice and think they are missing out on reclaiming VAT, but if there was no VAT on the invoice in the first place, there is nothing to reclaim.

You need a valid VAT invoice from your supplier in order to reclaim the VAT.  If you take on a new supplier and you are not sure if they are VAT registered or not then you need to do due diligence to check if they are VAT registered. If you try and reclaim VAT without having a valid VAT invoice then you are the one in the wrong and if the HMRC inspect you, you could be asked to repay the VAT incorrectly claimed. They are reasonable and say you use a supplier regularly and have VAT receipts in 90% of cases then you may be OK, but this is at the discretion of the inspector.

Also, we currently have an agreement with certain EU countries that if you give the supplier your VAT number then they can invoice you without VAT from their home country and vice versa.  But you need to check when supplying to another country in the EU that the VAT number is valid and that the goods are actually being exported.  You also need to send a European Community Sales List as well as your normal VAT return for any sales you make to European countries – you can read more details on the HMRC website https://www.gov.uk/government/publications/vat-ec-sales-list-vat101

Here is an excellent site which gives you the tools to check if a VAT number is valid or not, and also a way to check if the European VAT numbers you have been given are valid too. http://www.smallbusinesspro.co.uk/tax/vat-numbers.html

If managing your bookkeeping and coping with VAT and VAT returns is new to you, then why not book some bookkeeping hand holding sessions with Alison so you can make sure you are doing everything correctly.

For more posts with Bookkeeping hints and tips then check out the bookkeeping tag on our website.

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