VAT registration and intending traders – HMRC update

2 September, 2020

The ATT has raised concerns with HMRC regarding applications for VAT registration being automatically refused where the business indicates in their application that they will be making little or no taxable supplies in the next 12 months.

In response, HMRC have provided the following update:

HMRC is aware that in certain business sectors there is a likelihood of zero turnover for “the next 12-months” when a customer registers; currently if there is a zero turnover placed in the VAT 1 then as per our risking parameters in some circumstances an application can be rejected. These risking parameters are under constant review to mitigate any impacts they may have on particular intending trader customer sectors, but until any specific changes come in to effect it may be beneficial for your members to know they can provide the evidence for the eligibility of their clients using the VRS email address;

In circumstances where an application has been rejected and where a customer believes this was due to them stating a zero next 12-month turnover, they can send an email/appeal to the email address for new VAT registrations: [email protected] 

In the email they would need to include any narrative and/or attachments which evidence the eligibility to register along with the acknowledgement reference number provided in the rejection letter. On receipt of this email the VAT Registration team will review their original application and process the application accordingly.