Small Business Taxes

What is a VAT Number?

Apr 29, 2024 4 min
what is a VAT Number?

What is a VAT Number?

Reading Time: 4 minutes

A VAT number is like a special identification tag for businesses that sell taxable goods and services.

It’s a nine-digit code issued by the HMRC with the prefix ‘GB’ in England, Scotland and Wales that lets you add a tax to prices of items or services, get money back for VAT paid on business expenses and be recognised by other businesses.

In Northern Ireland, VAT-registered businesses use the prefix XI to trade under the Northern Ireland Protocol.

Let’s get into the details of this special identification tag for businesses.

Table of content:

Why is it important?

A VAT (Value Added Tax) number is important for several reasons:

  • Tax Compliance: Businesses with the nine-digit code issued by the HMRC are registered to collect VAT on behalf of the government. It’s a legal requirement for businesses with a VAT-taxable turnover above £90,000.
  • Business Credibility: Having the code can enhance a business’s credibility, showing that it’s recognised by HM Revenue and Customs (HMRC) as a legitimate entity.
  • VAT Reclaim: Registered businesses can reclaim any VAT they’ve paid on business-related purchases, which can significantly reduce costs.
  • International Trade: A VAT number is often required for trading within the EU and importing goods into the UK, making it essential for international business operations.

Submit Your Tax Return Online on Akaunting’s MTD for VAT (UK)

Who needs it?

Generally, businesses whose taxable turnover exceeds a specific VAT registration threshold within a set period are legally obligated to register for VAT. This threshold varies between countries. In the UK, the threshold for VAT registration is £90,000.

VAT number is also required if:

  • A business anticipates its turnover surpassing the VAT threshold in the next 30 days.
  • A business imports goods into the UK from the EU above a specified value

Some businesses choose to register voluntarily even if they fall below the threshold.

Where to find it

When searching for the VAT number of a business, you should first check any invoices they have issued to you. If the business is VAT-registered, its unique ID will be displayed on all invoices and receipts.

Should you pay VAT to a supplier and find no registration number on their invoice, contacting them without delay is crucial. You must possess a valid VAT invoice to reclaim any VAT you’ve been charged.

How to get it

Here’s a breakdown of how to get your unique nine-digit code in the UK:

how to get a VAT number in the UK

Check if You Need to Register

You must register for VAT if your taxable turnover exceeds £90,000 in a rolling 12-month period.

Check out: How Much is VAT in the UK

Gather Your Information

You’ll need the following:

  • Business Details: Company name, address, nature of business activities, projected turnover.
  • Personal Details: National Insurance number, contact information.
  • Bank Details: Your business bank account information.
  • Existing Tax Numbers: Unique Taxpayer Reference (UTR), if applicable.

Register with HMRC

  • Online Registration: The most common method is through the HMRC website: You’ll need to create a Government Gateway account if you don’t have one.
  • Post: You can obtain a paper VAT1 form from HMRC and submit it by post if preferred.

Processing and Issuing

HMRC will review your application and may ask for additional details. If approved, you’ll usually receive your unique 9-digit number within a few weeks, which you are to include on all invoices.

You’ll also receive:

  • Information on setting up your business tax account (if you don’t have one already).
  • Details about when to submit your first VAT return and payment.
  • Confirmation of your effective date of registration (usually the 1st of the next month).

Check a VAT number validity

The UK government provides an online service to check if a VAT number is valid and to find a business’s registered name and address.

You can use this service to verify the date you checked it. Your own VAT number is required to utilise this feature.

For the EU, you can use the European Union’s VAT Information Exchange System (VIES) to check the validity of this number in EU member states.

What countries require a VAT number?

VAT (Value Added Tax) number is required in many countries worldwide, particularly in those that have implemented VAT or a similar tax system.

  • Every EU member country mandates businesses obtain a VAT number to trade goods and services. Each EU country provides its unique national number, and businesses that supply goods or services across multiple EU countries may need to acquire one in each country.
  • Numerous non-EU nations have implemented a VAT system and mandate a VAT number for businesses within their territories. The structure and requirements for VAT numbers differ across countries.
  • Several countries in Latin America also use the VAT system and require businesses to have a VAT number for tax purposes.
  • The United States does not utilise the VAT system. Instead, it employs a sales tax, which varies by state and is non-refundable.

Is a VAT number the same as a UTR number?

No. A Unique Taxpayer Reference (UTR) and a VAT (Value Added Tax) number serve distinct purposes in the UK tax system.

The UTR is a 10-digit number HMRC provides when someone registers for Self Assessment for the first time. It Identifies taxpayers (individuals, businesses, organisations) for the Self Assessment tax system. This covers income tax, National Insurance contributions, and sometimes Corporation Tax.

VAT (Value Added Tax) number typically consists of 9 digits, often presented with a country code prefix (for example, ‘GB’ for the United Kingdom). It specifically identifies businesses registered for VAT (Value Added Tax). Unlike UTRs, VAT numbers are specific to VAT-related activities and do not cover broader tax matters.

Is an EIN the same as a VAT number?

No. An EIN (Employer Identification Number) is used in the United States for tax identification purposes. It serves a similar function but is a separate system and identifier from VAT numbers.