4 December 2007

HMRC issue -Top Tips' to reduce VAT registration delays

If you have submitted a VAT registration form recently you are probably aware that HMRC are failing to meet there 14-day target of clearing complete and low risk VAT applications.

During the summer the then Chairman of HMRC, Paul Gray, explained the reasons for the delays and the steps being taken to ensure the turnaround times were improved.

The reasons the targets were not being met were explained as:

• The need for tightened procedures to identify Missing Trader Intra - Community (MTIC) and other serious fraud
• Consolidation of VAT registration work into two sites at Wolverhampton and Grimsby
• A spike in the number of applications following the Budget 2007 announcements on Managed Service Companies
• IT problems

Mr Gray said the following actions had been or were being taken:

• Recruitment of additional staff at Wolverhampton
• More existing staff moved to registration activity
• Reviewed and updated the risk assessment parameters
• Stabilised the IT problems

As predicted by Mr Gray the turnaround times have improved, with the average time taken to complete an application falling from 38 days back in August to 28 days now. However in view of the delays and problems arising in connection with VAT registrations, HMRC have issued the following list of Top Tips for completing VAT registration application forms.

VAT Registration
Top Tips for completing VAT 1 application form

1. Guidance Notes
It is important that you read the guidance notes that came with the application form. These will help you complete the form and also tell you if you need to send in any extra forms. Sending all the documents needed at the same time will reduce delay in processing your application.

2. Authorising an Agent
If you are authorising an agent (a tax advisor or an accountant) to act on your behalf (by completing form 64-8) please send the 64-8 form with your VAT registration application.

3. Completing the form

Box 1 - Status:
Partnership: You will need to enclose VAT2 form with details (including the National Insurance number) and signature of each partner.

Limited Company: You must provide the Company number and incorporation date. The date you are applying to be registered from must be after the incorporation date.

Box 5 - Business address /telephone number:
This should be the address in the UK where the day to day running of the business is carried out. Other address - such as "care/of", PO Box, an accountant's address, or a non UK address or telephone will be queried and this may delay your application.

Box 6 - Business Activity
Please provide a full description of the business activity - for example "wholesaler of fruit and vegetables" or "management consultancy services". Less clear descriptions such as "wholesaler" or "consultancy" will be queried.

Box 7 - Associated Companies:
This must be completed if any of the partners or directors are currently, or have been in the last 2 years, involved in any other business. Full name(s) and VAT number(s) of those business(es) are required.

Box 8 - Bank Account
If your bank account is still being set up, you should provide any evidence you have to support this - for example a copy of the application form or other correspondence with your bank. Please do not enter duplicate bank information of associated business(es).

Boxes 9 - 12 Transfer of a Going Concern
If you are taking over (or about to take over) a business as a going concern you must complete boxes 9-12. To use the previous owner's VAT Registration Number also complete and send Form VAT68 (taking over a previous owner's VAT Registration number may not be sensible for your business so ensure you understand the implications and/or take advice on this before deciding).

If you have any queries concerning VAT please speak to your usual Hazlewoods contact or our Senior VAT Manager Julian Millinchamp on 01242 237661 or e-mail: jwm@hazlewoods.co.uk