When UK businesses deal with businesses from other EC countries, HMRC expects the due diligence to include regular checks on the overseas businesses’ VAT registration numbers.
Failure to complete this reasonable check could result in various adverse consequences. If the UK business had zero-rated its supplies on the strength of the customers’ VAT registration numbers, it could find itself liable for UK VAT on the transactions. Worse, if there is a VAT fraud elsewhere in the supply chain, the UK business could become liable for any VAT not paid by fraudulent parties.
On 15 October 2012, HMRC issued a revised Notice 725 “The Single Market”, including a useful checklist (click here) to help businesses spot incorrect VAT registration numbers at a glance.
For formal, written confirmation that a VAT registration number is valid, use the European Commission’s website: here.
If you would like further information on validating VAT registration numbers, or for any VAT queries on international transactions, please contact the TaxDesk on 0845 4900 509 and ask for Vaughn Chown or Kevin Hall.