Why Is My VAT Registration Taking So Long? (How Long Does It Take)

If you have registered for VAT, and still haven’t received confirmation back, it’s understandable that you might be concerned. 

Occasionally there can be a VAT registration backlog, or there could have been an issue with your registration. This short guide explores the factors that contribute to why it is taking so long to get VAT registered, and how long it might be before your get your VAT number. We’ve even some advice on what to do when waiting for VAT registration.

But here’s the short answer first as to why your VAT registration taking so long…

VAT registration delays have plagued HMRC since the pandemic meaning some VAT registrations can take as long 40 days (8 weeks). The reason why it is taking so long to get VAT registered has been attributed to large volumes of fraudulent activities requiring additional checks, but it might also be down to constant workforce losses. 

What this means for you, is that it could take as long as two months to get a VAT number for your business. However, it could take longer than that for your VAT registration to come through, with some reporting VAT registration delays of several months longer if additional checks need to be carried out. 

The current VAT registration backlog

HMRC have stated that applications by post can take up to 30 days to process. With HMRC closing the VAT registration helpline on 22^nd May 2023 customers are not left waiting for responses by post.

85% of calls to the helpline were from businesses wanting to check the process of their VAT registration, HMRC decided they could get through those applications quicker without answering those calls! We have covered various scenarios below to help you understand what to do when waiting for your VAT number to be issued.

Did You Know: Research suggests that the best time to call HMRC is… revealed here.

How long does it take to get a VAT number after registration?

The time it takes to receive a VAT number after registration can vary depending on several factors. In general, it typically takes between two to six weeks for HM Revenue and Customs (HMRC) to process the VAT registration application and issue a VAT number. 

However, this timeframe is not fixed and can be subject to delays.

How long does HMRC take to process VAT registration?

Ideally, the VAT registration process should be completed within the two to six weeks we mentioned. However, it is essential to note that unexpected circumstances, such as a VAT registration backlog of applications or additional checks required by HMRC, can result in longer processing times.

Currently it could take up to 40 working days, around eight weeks, to deal with a VAT registration request.

What to do when waiting for VAT registration?

While waiting for your VAT number given current VAT registration delays with HMRC, there are several actions you can take to ensure you remain compliant and prepared for when the registration is complete. These include:

• Maintain accurate records: Ensure that your business records are up to date and organised, as this will facilitate the VAT registration process and subsequent tax compliance.
• Prepare for VAT implementation: Familiarise yourself with VAT requirements and obligations, including understanding how to charge and reclaim VAT correctly, and consider implementing necessary changes to your invoicing and accounting systems.
• Seek professional advice: Consult with an accountant or tax advisor who can guide you through the VAT registration process, help you understand your obligations, and provide insights on compliance and recordkeeping.

Accounting for VAT while I wait for VAT number

You must assume you are VAT registered from the date you stated on the VAT registration. So, if you ask to register from 1st September 2022, then that is your EDR (Effective Date of Registration) and whilst it may take 6 months for HMRC to issue a VAT number, when HMRC do issue the VAT number, it will be with effect from 1st September 2022 as per the date stated on the registration form.

There is no such thing as “approval date”, you specify when you want to register from (EDR) and that is the date you are registered from, any delays from HMRC in advising you what your VAT number is, doesn’t change your EDR.

The business cannot show VAT on their invoices until they have a VAT number, but you can charge a gross amount initially and then when VAT number received, re-issue those invoices showing net/VAT/gross. 

For example, I make a sale whilst waiting for my VAT number, so I charge £120 on the invoice (just a gross amount). I have thus collected both the net (£100) and the VAT (£20) but not called it VAT or shown VAT anywhere.

Customer pays me £120. When I get my VAT number several months later from HMRC, I re-issue that invoice but now showing £100 net + £20 VAT = £120, my invoice has my VAT number on it. I use this invoice to declare VAT on my first VAT return to HMRC.

It is extra admin but means the business is collecting the VAT from the customer at time of sale and will have the funds to pay HMRC once VAT number is issued.

In the alternative, I can just invoice the client for £100 and then when I get my VAT number, I issue a VAT only invoice for £20, but the risk here is that the customer might say “go away I’ve already paid”. Certainly, if it is a consumer customer, a business customer will usually have no issue paying a VAT only invoice, but either way it is a risk, so HMRC guidance advice charging gross and issue proper invoice later.

Why is my VAT registration taking so long? (several reasons)

There can be several reasons why your VAT registration is taking longer than expected:

• Backlog: HMRC may have a backlog of VAT registration applications due to a high volume of submissions, seasonal demands, or other factors. This can result in delays to VAT registration processing times.
• Verification and checks: HMRC may need to perform additional checks on the information provided in the VAT registration application, such as confirming the authenticity of the business or assessing the risk of potential tax evasion.
• Incomplete or incorrect information: If the VAT registration application contains errors or missing information, HMRC may request additional details or clarification, which can cause VAT registration delays  
• Complex business structure: If your business has a complex structure, multiple branches, or involves international transactions, it may require additional scrutiny and time for HMRC to assess the VAT registration application.

FAQs on VAT registration delays

VAT Registration delays in 2023

While specific delays in VAT registration in 2023 may vary depending on the circumstances, it is possible that external factors, such as changes in regulations, increased workload on HMRC due to Brexit, or adjustments in response to the COVID-19 pandemic, may contribute to processing delays and a longer backlog than usual.

HMRC have been plagued with long delays since the pandemic with VAT registrations often taking up to 40 days (8 weeks) this is being put down to large volumes of fraudulent activities requiring additional checks, but it might also be down to constant workforce loses. I think for now we must assume that these delays are the new norm. At least for now.

Conclusion

Registering for Value Added Tax (VAT) is a necessary step for businesses in many countries, including the UK. The current compulsory VAT registration threshold is £85,000 (2023) taxable turnover. If you think you may have exceeded the compulsory threshold please read our guide on what to do when going over the VAT threshold.

You can of course also register for VAT voluntarily if it makes sense for your business. If you are not sure whether this applies to you then you may wish to check out should I register for VAT.

In conclusion, obtaining a VAT number is an important step for businesses, but it can sometimes take longer than anticipated. The duration of the VAT registration process depends on various factors, including HMRC workload, additional verifications, and the completeness of the application. 

While waiting for your VAT number, it is essential to maintain accurate records, prepare for VAT implementation, and seek professional advice. 

By staying proactive and informed, you can ensure compliance and be prepared to fulfil your VAT obligations once the registration is complete.

You might also like…

• The pros and cons of being VAT registered