What to Do When You're Waiting for Your VAT Number and You Need To Charge VAT?
Waiting for a VAT number from HMRC can be frustrating, especially when your business is legally required to start charging VAT. If you’ve applied for VAT registration but haven’t received your number yet, you might be wondering what to do next. At Blue Rocket Accounting, we help businesses navigate VAT compliance, ensuring they stay on the right side of tax regulations while avoiding unnecessary delays.
Why You Might Be Going VAT Registered
From April 6, 2024, businesses must register for VAT if their turnover exceeds £90,000 in a rolling 12-month period. Some register voluntarily to reclaim VAT on expenses or to appear more credible to clients. Understanding the benefits and requirements of VAT registration can help businesses stay compliant and make informed decisions.
Why You Might Be Waiting for a VAT Number
VAT registration typically takes around six weeks, but we've seen some delays of up to four months on occation. HMRC may take longer to process applications due to a backlog, incomplete forms, or missing information. In some cases, additional checks are required, which can slow things down further.
What to Do Before Your VAT Number Arrives
So, you've applied for VAT registration, and while waiting for your VAT number, the date you’re supposed to start charging VAT has arrived. Here’s what to do:
- Do not charge VAT yet – You cannot legally charge or display VAT on invoices without a VAT number.
- Issue VAT-free invoices – Continue invoicing without VAT but add a note stating "Pending VAT registration."
- Ensure correct pricing – Adjust your pricing as if VAT were included, since HMRC will still require VAT payments once your registration is confirmed.
Example: Managing Invoices While Waiting
The table below shows how to adjust your invoicing during the VAT registration waiting period:
This ensures you have set aside the correct amount to pay HMRC once your VAT number arrives.
Clear Communication Is Essential.
Let your clients know that once your VAT number is issued, they will receive updated invoices reflecting VAT charges. This transparency helps maintain trust and ensures compliance.
Top Tip: You can add a note onto your invoice saying "pending VAT number"
Monitor your turnover closely
Monitor your turnover closely and apply for VAT registration as soon as you approach the threshold. Being proactive helps prevent delays and keeps your business running smoothly. From April 6, 2024, the VAT threshold is £90,000 in a rolling 12-month period.
Need VAT help?
If you need help with VAT registration or compliance, contact Blue Rocket Accounting today. We’re here to help businesses stay on track and avoid costly mistakes.
Want to Explore More About VAT?
We think you’ll find the below blogs quite helpful
- HMRC VAT Email Scam Warning: Fraudsters Targeting Businesses | Blue Rocket
- Guide to Registering Your Business for VAT | Blue Rocket
- How Do Late Penalties Work If You Pay Your VAT Late? | Blue Rocket
