Posted 10 months ago by Tracy
Business VAT numbers are incredibly important pieces of information. Once a company is registered for VAT, it will be provided with a unique VAT number that other businesses need in order to reclaim the VAT that they have paid. Without this, a claim could be rejected, potentially resulting in a hefty bill or a time-consuming task of rectifying the situation.
Unfortunately, finding a business’ VAT number can be tricky, especially for companies outside of the EU, but it’s essential that you always verify a VAT number before submitting any official documents.
Value added tax (VAT) – known in some countries as a goods and services tax (GST) – is a sales tax levied on most goods and services and is in use in 140 countries across the globe. Rates vary by country, and exemptions and reductions do apply, although EU law requires Member States to levy a standard VAT rate of at least 15 percent and a reduced rate of at least 5 percent.
While VAT registered businesses charge their customers VAT on the products and services they sell, they also pay VAT on the products and services they buy, such as raw materials or stock. The majority of VAT-registered businesses can claim back the VAT they pay on business expenses, meaning they only pay the difference between the amount they have collected and the amount they have paid. If VAT expenditure is higher than what they have received from customers, they can reclaim the difference. The flat rate scheme differs somewhat in that VAT is only calculated on income.
Most European countries set thresholds for their VATs. This means that a business’s revenue of taxable goods and services must be above a certain value before it is required to register and pay VAT on its products. For limited companies in the UK this currently stands at £85,000 per year.
Once you register for VAT with HMRC you’ll receive a certificate with your VAT registration number. This will also be quoted on all relevant future correspondence, so keep these documents safe in case you need to refer back to them. This information can also be found in your HMRC business account. Choose ‘View Your VAT Account’ and you’ll have the option to view your certificate.
There are a number of places to look in order to find the VAT number of another business. If you’ve already had correspondence with them, such as a previous invoice, the number should be on there. It may also appear on other documentation such as insurance forms or claims. To find a VAT number, look for two letters followed by a hyphen and 7-15 numbers; it will usually be at the top or bottom of the page.
If this isn’t an option, the detective work really begins. The first step is to ensure you know the company’s full, official name and where it’s headquartered. In the UK, Companies House can be a useful source for this information, or search for the company’s stock price.
If you're looking for the VAT number of a company based in the European Union, begin by looking up the country's VAT code. The country code is always two letters that correspond to the country's ISO code. For example, UK VAT numbers always begin with GB, France's start with FR and Germany's start with DE.
Be aware, however, that a country's VAT code changes based on the language that is being used. For example, the VAT code for Italy is IT in English, but IVA in Italian, so be sure to use the right VAT code based on who is requesting the information.
Once you have this information, the next step is to visit a VAT number search engine. Options include:
For companies based outside of the EU, the best option it to check if the country has a digital VAT registry. Australia, for example, has an official registry on the government website but here it’s known by the acronym ABN – Australian Business Number. China does have a register but it’s only available in Mandarin. Others such as India and Malaysia don’t publicly publish VAT numbers, so in cases such as this you’ll have to contact the company directly and perhaps file an official request.
The format of VAT numbers varies by country, with the country code then followed by up to 15 characters, depending on the location. So, while UK VAT numbers will be GB followed by 9 digits, numbers in the Netherlands would begin with NL, followed by 12 characters with the 10th character always a B. Other formats include:
A full list of country code formats is available on the UK government website.
As using an incorrect VAT number can be a time-consuming and costly error, it’s worth taking the time to validate it before submitting your documents. The VIES website comes in handy once more for this. Simply enter the VAT number you have and the corresponding company will be displayed confirming if you have the right information.
You can also contact a country's customs agency or business bureau by phone to see if they have a tool for authenticating a VAT number, something which may be necessary for those countries that don’t publicly publish VAT numbers. In the UK you can call HMRC’s dedicated VAT helpline on 0300 200 3700.
If you discover an invalid VAT number it will likely be due to human error, so step one is always to contact the company and reconfirm the details. If the intent seems more sinister, it could be a case of fraudulent activity – although it should be noted that it is illegal to intentionally provide an incorrect VAT number in most countries. In this case you can report it to the relevant authorities, often anonymously.
Of course, VAT registration information can change, if the company is sold or acquired, for example, so it’s important to keep a record of any searches you do in case you need to prove that the information was showing as correct at the time of the search. Once again, the VIES site can be a useful port of call here as it allows you to print or save search results.
In the UK you can claim your VAT refund by submitting a VAT return. You can do this manually via your VAT online account or use accounting software to make this a much more efficient process.
In AccountsPortal you can create a VAT report in seconds. They are automatically customised depending on your location and you’ll benefit from automatic submission to HMRC for UK customers.