What is a VAT number?

Updated on May 30, 2022

A photo of a man writing his VAT registration

“What is my VAT number?” Have you ever typed this question into Google? We understand if you’re perplexed by them. VAT registration, VAT kinds, and how to invoice with VAT are all things you’ll want to know about when it comes to running your business.

Who, on the other hand, has the leisure to read countless government advice sites and articles? Unless you’re a celebrity, you probably aren’t. What you need to know is all here, so you don’t have to conduct any research. Listed below are the steps we’ll take to help you:

What is a VAT number, and how do I get one?

Whether or not you need to get a VAT number for your firm.

How can you get a VAT number for your business?

Exactly what data you’ll be expected to supply

Obtaining a VAT number and how long it takes

Issuing invoices before registering for VAT

After registering for VAT, you can begin invoicing.

Be that as it may, let us first go over some fundamentals…

What is a VAT number?

It stands for value added tax identification number, or VATNumber. Businesses that have a VAT number are required to add VAT to the prices of their products and services. As a result, businesses are allowed to reclaim the VAT they paid on their purchases.

Does my business need a VAT number?

Fortunately, it’s simple to determine whether or not your company needs a VAT number. If a business’s VAT taxable turnover exceeds £85,000, or is expected to do so in the near future, they must register for VAT. Every non-VAT item that your company has sold is included in your VAT taxable turnover.

Exempted from VAT by the UK government are:

Insurers, lenders, and creditor

Training and education

Events to raise money for charitable causes

Subscriptions to membership organisations

Commercial real estate sales, leasing, and letting (this can be subject to change)

Due to the nature of the products or services they provide, some businesses may be exempt in whole or in part. For those who intend to exceed the VAT taxable limit, you may want to register as a voluntary taxpayer. After exceeding the limit, if you register, you’ll have to pay what you owe.

By contacting HMRC, you can request an exception if your business is just temporarily over the limit.

A photo of receipts for vat on food and drink

How to get a VAT number?

The good news is that most UK companies may readily register with HMRC online. Simply supply the following:

Your revenue, business activities, and financial information

Your date of registration

All of your future VAT returns can now be submitted online once you’ve completed the aforementioned steps and obtained a Government Gateway account.

Do I have to register myself?

If you don’t want to deal with the trouble, hiring an accountant is a completely acceptable option. A designated accountant is permitted by the UK government to handle all of your tax returns.

How long does it take to get a VAT number once I’ve registered?

A “certificate” should arrive within 30 working days of your registration. As long as nothing else comes up, this can take a long time. Your Government Gateway account will be sent a copy of the certificate.

What do I do while I wait for my VAT number?

Here’s where most folks go astray. You’d expect that after you’ve received your VAT certificate, you can begin charging VAT. No such thing has happened. Your registration date is the date that VAT is due, whether or not your business has a VAT number.

As a result, VAT invoices cannot be issued during this time period. We’ll go into more detail about it later.

What do I do once I’ve received my VAT number?

Now comes the fun part. What do you need to do now that you’ve completed the registration process and are ready to get started?

When it comes to products and services that aren’t VAT exempt, you should begin charging the usual 20% VAT rate.

Your purchases from other companies should be subject to VAT.

Every three months, submit your online VAT returns.

In order to make sure that the amount of VAT you charge and the amount you pay are equal, and that if there are any big differences, you get this money back when you file your return every few months.

A photo of a woman filling vat returns

Invoicing and VAT registration

HMRC will not enable you to reclaim VAT if your invoice is in any way invalid, therefore it’s important to get it right when invoicing. Here’s everything you need to know to make sure you never miss out on a penny of compensation.

Invoicing while waiting for my VAT number

Instead of emphasising the VAT on an invoice, they recommend that you just increase your pricing to incorporate the regular UK VAT rate of 20 percent. (UK).

Here’s a case in point:

The price of your regular product is £13.15.

The invoice is now £15.78 instead of £13.15 because you tacked on 20%.

Make the invoice total of £15.78 and don’t reveal your calculations.

Once you’ve obtained your VAT number, you’ll be able to give your customer an updated invoice that clearly states the VAT amount.

Invoicing once I’ve received my VAT number

There are three things you must do in order to ensure that you are entitled to your VAT claims, according to government standards.

As a first step, make sure to issue and maintain track of all valid invoices, whether in paper or digital form.

It’s also a good idea to save any sales invoices, even if they’ve been cancelled.

The next tip is to save all of your business’s purchasing invoices.

Invoicing with VAT as a small business

Not everybody’s issued an invoice before, and for a lot of small business owners, it’s new territory. That’s why the team at SumUp has created SumUp Invoices, so you can send personalised and professional invoices via your SumUp App in just a few clicks.

For more tips and tricks on making business easier, head over to the SumUp blog.