VAT registration goes online-only next month

Businesses and their agents/advisers will need to apply to register for VAT through HMRC’s online VAT Registration Service from November 2023, the UK tax authority said in a recent agent update.

From 13 November, HMRC is removing the paper VAT1 form unless businesses and/or their agents are digitally excluded, or unable to use the online VAT registration service (see below). Anyone needing the paper form to register for VAT will need to call the VAT helpline to request one.

“HMRC is providing simpler, secure and more efficient services for customers, such as the [VAT registration service], as part of our vision to be a trusted and modern tax and customs department,” HMRC said in the update. “Over 95% of customers already use this service – it’s the quickest, most secure and easiest way.”

HMRC added that supporting taxpayers “is a key priority… and moving to online applications for VAT registrations aligns with HMRC’s ambition to increase the use of digital channels including Making Tax Digital (MTD).”

The tax authority also said it was “committed to offering greater digital options to give customers the experience they expect from a modern tax authority,” adding that most taxpayers “are digitally able and many report a better experience when using digital channels – accessing their information at a time and place that suits them”.

However, Buzzacott VAT director Linda Skilbeck shared a caveat on social media channel X: Applicants are not currently able to use online VAT registration unless they have a unique tax reference (UTR) number. Skilbeck pointed out that this would affect charities, FE colleges, academies, LLPs, joint ventures, overseas entities and VAT group applicants.

“Also, HMRC VAT staff are not trained that corporate bodies can be incorporated by statute/decree [and] won’t be on Companies House, or that many charities don’t have to be registered with Charity Commission. So expect extra admin delay [and extra costs] to use online service,” she added in a separate post.

Also #HMRC #VAT staff are not trained that corporate bodies can be incorporated by statute/decree & won't be on Companies House; or that many charities don't have to be registered with Charity Commission. So expect extra admin delay +£££ to use online service. https://t.co/ZOoDuz0q7w

— Linda S (@VATskills) October 11, 2023

Further details

HMRC’s agent update instructs that agents should continue to use the online VAT Registration Service through the Agent Services Account, “and to avoid unnecessary delays, ensure [you] have relevant client details ready and input them correctly.”

However, for those that are unable to access and use HMRC digital channels, HMRC says it will always provide a service to meet their needs, continuing to offer support through non-digital channels such as the phone, including our extra support service.”

“We know some customers will still need to apply by post on a [paper] VAT1 form if they are either exempt from applying online or if it is a specific type of registration. Customers can ask for a VAT1 form by calling the VAT helpline. They will not have to apply for an exemption in advance, but we may ask why they want to apply by post.”

While a complete list of businesses that will be unable to use the online service is not currently available, it is understood that the list includes, but is not limited to:

• Businesses applying for a ‘registration exception’
• Businesses joining the agricultural flat rate scheme
• Overseas partnerships
• Entities (other than UK partnerships or non-established taxable persons) without a UTR

This latest HMRC announcement comes after IFA members expressed concerns over the closure of the VAT registration helpline in May 2023. HMRC’s justification was that 85% of telephone calls to the helpline were chasing progress updates on VAT registration applications. The VAT registration helpline was closed on 22 May with just three working days’ notice, and is one of many HMRC telephone helpline closures this year.