A VAT number is a unique ID that HMRC gives businesses when they register for VAT (value-added tax). In the UK, VAT numbers have nine digits and always start with ‘GB’.
VAT numbers for companies in the EU follow a different format, with their own unique country codes. HMRC provides a list of ID formats from European Union member states on its website.
This guide will cover:
- Why you need a VAT number
- How to register for VAT
- Where to get your VAT number
- How to find a VAT number for a company you trade with
- How to check if a VAT number is valid
- How to reclaim VAT from HMRC
Why you need a VAT number
Reclaiming VAT without a valid VAT number from your supplier could lead to HMRC rejecting your claim. If this happens, you could be left footing the bill yourself and dealing with a massive amount of admin to sort out the situation.
If your company makes more than £85,000 per year, you have to register for VAT and charge it on all goods or services that are VAT taxable. Otherwise, your customers or clients risk facing the same issue we mentioned above, and HMRC could hit you with a massive back check.
How to register for VAT
You can easily register for VAT for free, and you’re best doing it online through the HMRC website since it’s the fastest option. Start the registration process here.
However, if you prefer to register by post, you can download a form on this page.
To register, you need:
- A National Insurance (NI) number or your tax identifier
- Details of other businesses you’ve owned within the past two years
- Your business bank account details
- You’ll also need a record of the sale if you bought the business
Where to get a VAT number
Once you register for VAT, HMRC will send you a certificate with your VAT registration number. HMRC will also include your number on all relevant future communication, so keep these documents safe if you need to refer back to them.
You can also find all this information in your HMRC business account. Click on ‘View Your VAT Account’, and you’ll see the option to view your certificate.
How to find a VAT number for a company you trade with
When you need to find the VAT number of a business you trade with, you should find it on the invoice they sent you. VAT registered companies are required to include their unique IDs on all their invoices.
If you’re getting ready to pay a VAT registered supplier that doesn’t have a registration number on the invoice, contact them immediately. It’s most likely just a mistake on their end, but you need a valid VAT invoice from your supplier to be able to reclaim any of the VAT they charged you.
Worst case scenario, calling them to check could save you from getting scammed. It pays to be safe!
How to check if a VAT number is valid
There are a few ways you can check if a VAT registration number is valid:
Calling the HMRC VAT helpline
HMRC has a complete database of VAT-registered businesses. If you’re in any doubt about a registration number, you’re advised to call their VAT helpline on 0300 200 3700.
Checking the VIES website
For EU companies, you can use the European Union’s VAT Information Exchange System (VIES) to check a VAT number’s validity. You can check both UK and EU VAT numbers there.
Simply enter the registration number your supplier shared and the relevant country codes in the fields provided to check if the VAT number is valid.
If the supplier’s VAT registration is shown as invalid, contact them to get the right VAT number as soon as you can.
Checking the number yourself
Contrary to what you may think, the VAT registration number is not random. In fact, the numbers follow a set formula that can be checked to see if the number is valid.
For UK VAT numbers, you can do the following exercise:
Excluding the first two letters (GB), list the numbers vertically and multiply each by a value, starting with 8 and ending with 2. Add up all the answers you have and subtract 97 from the total until the answer is negative (below 0). The negative sum should be the same as the last two digits of the VAT number.
For example, the VAT number for HSBC bank is GB 365684514, meaning the calculation is:
3 x 8 = 24
6 x 7 = 42
5 x 6 = 30
6 x 5 = 30
8 x 4 = 32
4 x 3 = 12
5 x 2 = 10
The sum of the calculation is:
24 + 42 + 30 + 30 + 32 + 12 + 10 = 180
Subtract 97 twice from this number to get the result below 0, so:
180 – 97 – 97 = –14
As you can see, the number is the same as the last two digits, so the VAT number is valid.
How to reclaim VAT from HMRC
You can usually reclaim VAT from business purchases, including:
- Staff travel and meals
- Mobile service plans for business calls
- Company vehicles, including fuel, accessories and maintenance
- Utility bills if you are a home business (only the percentage you use solely for business purposes)
You can’t reclaim VAT on:
- Entertainment costs
- Anything that is purely for private use
- Things bought from other EU countries
How HMRC repays your VAT refund
Claim your refund by submitting your VAT tax return to HMRC. You’ll need to share your account details even if you’ve already set up a direct debit for VAT returns.
You can also use your online account to add or change your details and to view any refund you’re owed –– unless you’ve signed up for ‘Making Tax Digital for VAT’. Find out more about Making Tax Digital here.
You usually get your refund within ten days of HMRC receiving your return. However, it can take longer, so only contact HMRC if you haven’t heard anything after 30 days.
Manage your finances quickly and efficiently with Countingup
When you sign up for a Countingup business current account, you get free built-in accounting software that allows you, or your accountant, to keep track of your accounts with ease.
We’ve automated the time-consuming aspects of bookkeeping and tax planning, so you can focus on running your business. You’ll get insights into your profit and loss, cash flow as well as tax estimates and the ability to create instant invoices.
Keep your finances running like clockwork. Find out more and get started here.