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Digital by default: VAT registration goes online only

Tax authority HMRC is removing paper VAT registration from November 2023, pushing ahead with the move to ‘digital by default’ with online-only tax services.

As of 13th November, businesses and tax agents must go online to register for VAT. If they are digitally excluded or unable to use the service, then they will have to call the helpline to make a special request for a paper form.

The switch to online-only VAT registration aims to make the application process faster, easier, and more secure, with the majority of businesses already using the digital service – but what if registering by post is the only option?

Paper-only VAT registration

Some businesses will still need to apply with a paper VAT1 form by post if they are unable to apply online or if it is a certain type of registration. Businesses must call the helpline to explain why they need a paper form if they want to:

  • Apply for a VAT registration ‘exception’ (when turnover temporarily exceeded the threshold)
  • Join the Agricultural Flat Rate Scheme (for farmers using the VAT98 form)
  • Separately register company divisions or business units with different VAT numbers

In addition to those without digital access, online registration is also unavailable for overseas partnerships or entities without a UTR (Unique Taxpayer Reference) – aside from UK partnerships and non-established taxable persons (NETPs).

Problems with VAT registration

While HMRC provides a VAT registration guide
online, it can be difficult to get direct advice and the assistance needed when HMRC has closed down many of its phone helplines to allow staff to focus on processing online applications instead.

Currently, businesses and agents can only call the VAT helpline if there is a genuinely urgent enquiry that cannot be resolved online or by mail.

However, with the VAT registration threshold being frozen at £85,000 since 2017 – and staying frozen until 2026 – more and more businesses are being pushed over the threshold by inflation and becoming liable for VAT.

This means more registrations to process, with HMRC taking an average of 30–40 working days to respond to an application or query.

Help with registering for VAT

With VAT still being accounted for from the date that registration became obligatory, invoicing in the meantime can run into problems.

There is also a new system of VAT penalties to contend with when it comes to filing returns and paying tax bills, so if your business is obligated to register for VAT and comply with these processes, you may want to seek professional support.

At gbac, our accountants in Barnsley can assist with a range of tax management matters and HMRC enquiries, including online registration.

Call 01226 298 298
or send an email to info@gbac.co.uk to enquire about our bookkeeping and VAT services.