If you are dealing with a new customer or supplier and want to check whether the VAT registration number (VRN) they have supplied is valid, there are two ways you can do so.
One method is to call the HMRC VAT Helpline, the other is to use the online VAT Information Exchange System (VIES) run by the European Commission.
1. Call the HMRC VAT Helpline
One option, you have to find out whether the VAT registration number you have been given is valid, is to call the HMRC VAT Helpline on 0300 200 3700 – between 8am and 8pm during the week.
However, there are two drawbacks with this option. The first disadvantage is that HMRC can only check up on the VAT number for UK registered businesses. The second issue is the limited opening hours of the VAT Helpline.
Given that you might well want to check a VAT number outside of the helpline’s opening hours, and that it can take time to get through to a member of staff even when the helpline is open, you might not find this to be the best alternative.
2. Use the online VAT Information Exchange System (VIES)
The second option is to use the online VAT number validation service provided by the VAT Information Exchange System (VIES).
The VIES website, which is operated by the European Commission, lets you check the validity of a VAT registration number for any business registered in the EU.
The system uses real-time data feeds from individual member states’ VAT systems so the information should be up to date at all times.
The main reason why the VIES service was established was to counteract the growing threat of ‘carousel fraud’, whereby innocent business and individuals find themselves caught in a chain of fraudulent transactions.
To access the European Commission’s VIES to validate a VAT number, simply go to this page of their website.
You then simply select from the drop-down menu, the country where the business is located, and then enter the VAT registration number you want to check. The site will then let you know whether the number is valid.
If it is a valid VAT registration number, the VIES website will confirm this and give you the name and registered office of the business.
Keep a copy of your search
Once you have checked a VAT number you can then print out or save the results of the search to prove to HMRC that the VAT number in question was valid at the time of your search.
By doing this, you can prove that you have acted in good faith if ever your dealings with a VAT-registered business is questioned by HMRC.
The VIES will also prove useful if you undertake zero-rate transactions with other EU businesses – as one of the conditions of zero-rating is that your clients or customers must be VAT registered.
What to do if a VAT registration number is not valid?
If you enter a VAT number into the VIES website and it says that it is not a valid VRN number, the first thing to do is to go back and check with your customer or supplier. It’s possible they accidentally gave you the wrong VAT number.
If the number continues to be ‘invalid’ after you have double-checked it with the company, you should inform them that the VIES system is reporting it as an invalid VAT number. The company can then get in touch with HMRC and ask that the data held in the national VAT Information Exchange System (VIES) is corrected.
You can only reclaim VAT if you have a valid VAT invoice
You can only reclaim VAT on supplies if you have a valid VAT invoice from a supplier. The details that must be shown on a valid VAT invoice include; the business name and address, a unique invoice number, the VAT registration number of the business, a description of the goods or services supplied and the date.
Before you claim back the VAT, you should first ensure that all these details are shown on the invoice. It is also good practice to check that the supplier’s VAT number is valid, especially when you are reclaiming a large amount of VAT.
If you don’t follow the rules, HMRC can refuse your request to reclaim the VAT. This will leave you out of pocket.
More help on ByteStart
ByteStart brings you help and tips on all aspects of starting and running a small business. Check out some of our most popular guides;
- ByteStart’s guide to Value Added Tax (VAT) for start-ups and small businesses
- 10 advantages running your business as a limited company has over being a sole trader
- What insurance policies are your business legally required to take out?
- How to develop a strong USP and use it to attract more and higher value customers
- 10 late payment excuses used by customers – and how to deal with them
- How setting up a salary sacrifice scheme can reward staff and cut your tax bill