transferring your VAT number
Lenah Oduor

Lenah Oduor

Lenah is a CIPFA qualified accountant with over 18 years’ experience in both business and accounting practice.

Transferring your VAT Registration Number

VAT can be complex and confusing at times. Under current guidelines, you need only register for VAT if your VAT taxable turnover exceeds £85,000. You can also register voluntarily, if you wish.

VAT – Value Added Tax is a consumption tax which applies to good and services. The current VAT rate (as of 2011) is 20% – this must be added to the price of good and services where VAT applies. Supposedly, VAT only applies to ‘non-essential, luxury items’, but there are some inconsistencies, so it’s worth checking.

With services, such as plumbing, decorating or building work, you only have to pay VAT if the company is VAT registered (i.e turning over in excess of £85,000).

There may be circumstances where a VAT registration number needs to be transferred to another business. Here, we answer some common questions about the process and how to navigate it with ease.

Why would you need to transfer your VAT registration number?

You may wish to transfer a VAT registration number if you have bought a company and wish to continue using it’s VAT registration number, or likewise, if you are selling a VAT registered business. You may set up a new business and wish to transfer your VAT registration to the new one, as the old business will no longer meet the threshold. Be aware the continually transferring a VAT registration number may arouse suspicions. If you are buying a company, but you are already VAT registered, you may use your current VAT registration number.

How to do it…

The first thing to remember about VAT registration transfers is that both parties must tell HMRC of the intention.

  1. Cancel any and all direct debits connected to the VAT registration number in question.
  2. Use your VAT online account to fill out a transfer form, OR send a VAT68 form by post.
  3. Within 3 weeks, you will receive confirmation from HMRC that the transfer has been successful.

Responsibilities…

Once the VAT registration number has been successfully transferred, there are a few final steps to complete to ensure VAT compliance.

  1. The original registration holder should cancel their VAT online account’s accountant access. (Unless the new registration holder intends to use the same accountant).
  2. Any and all records relating to the previous owner’s VAT registration number should be passed over to the new owner, to compile a complete VAT history.
  3. The new owner must set up new self-billing arrangements, in order to pay their VAT correctly – in order to do this, they must register for VAT from the day they take over the business.
  4. As the new business owner, you may only claim VAT on purchases for the business once you own it. These can be reclaimed on your first VAT return.

Once you are registered for VAT, you must pay your quarterly tax return online. There are some tax benefits to paying VAT, such as claiming VAT in director’s mileage.

If you’re confused or concerned about transferring a VAT registration, paying your VAT contributions or claiming back VAT, check out the HMRC website or get in touch today.

The information contained in this website is for general information purposes only. The information is provided by GHawk Accounting and while we endeavour to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is, therefore, strictly at your own risk and we accept no liability for action taken upon recommendations made in on this website.

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