Value added tax (VAT) is a type of tax that is applied to the goods or services that are being produced by a company. You must register your company with HM Revenue and Customs (HMRC) if you are earning a certain amount of business turnover. This certain amount is £86,000. Registering for VAT will mean that the company has a specified VAT number, the time duration in which the company should submit the VAT payment and return etc.
Each company has a specific VAT registration number. In the countries included in European Union (UN), this VAT identification can be easily identified through the official website. Before you get involved in a trade or business deal with another company, make sure you check for their VAT identification number. In this way, you will be able to get all the things done in the right way.
The VAT identification number is also beneficial if you want to get involved in any kind of business trading with another company of EU member states. One thing you need to consider while checking for the VAT identification number is to make sure that the number is not a fraud. There are some situations in which the companies provide you with the wrong or fake identification number. Although in some situations, it can be due to the printing errors or human errors but still, you need to make sure that the number is verified.
To eliminate the confusions that are being created because of the confusion in the verification of VAT identification number, HMRC has issued a notice. With the help of this notice, you will be to have a proper checklist of the number.
Checking the UK VAT identification number:
The process of checking the VAT number is done to check the validity. The process starts with checking the first 9 digits of the VAT number that is being provided. Make sure you eliminate the GB digits, as they are included at the start of VAT number sometimes by the companies. The first 7 digits of the VAT number will be random. However, the last 2 digits are the basic one on which your clarification will be dependent. These last 2 numbers are calculated with the help of a formula that is applied by using the first 7 digits of the VAT number.
The VAT number that is provided can be calculated easily with the help of the official website of the HMRC. Moreover, a company can also verify the VAT number by contacting the VAT help line directly. Make sure you are trading with the company that has a certified VAT number. With the help of the checklist provided by HMRC, you can spot a fat VAT number at a single glance.