VAT Validation for HMRC Compliance: Errors and Checks

What a valid UK VAT number looks like

A UK VAT number is 9 digits, usually written with the prefix GB, for example GB 123 4567 89. Some branch traders have 12 digits. Businesses in Northern Ireland trading goods with the EU use the prefix XI instead of GB.

The last two digits are a check digit worked out from the first seven. So a mistyped number usually fails straight away, even before anyone asks HMRC.

Why checking VAT numbers matters

• Your reclaim depends on it: you can only reclaim VAT with a valid VAT invoice from a VAT-registered supplier. If the number is wrong, HMRC can refuse the VAT you claimed.
• Fraud protection: if you knew, or should have known, that a purchase was connected with VAT fraud, HMRC can refuse your claim for the VAT on it. Basic checks on new suppliers are part of showing you took care.
• Correct invoices: your own invoices must show your VAT number, and checking customers' numbers keeps your records accurate.
• HMRC will not do it for you: your VAT return only includes totals, so HMRC does not check supplier numbers when you file. Problems surface later, in a compliance check.

How to check a VAT number

1. UK numbers: use GOV.UK's free Check a UK VAT number service. It shows the name and address registered to the number.
2. EU numbers: use the European Commission's VIES service. It also checks Northern Ireland XI numbers.
3. Compare the details: make sure the name and address match the business on the invoice, not just that the number exists.
4. Keep a record: note the date and the result, or save a screenshot or the reference, with your supplier records.

For a step-by-step guide to both services, see UK VAT number check made simple on GOV.UK and VIES.

What a check proves, and what it does not

Red flags to watch for

• The VAT number fails the check, or belongs to a different business name
• A supplier charges VAT but cannot give you a VAT number
• Bank details or the business name change without explanation
• Prices well below the market for goods that are easy to resell
• A new supplier with no trading history asking for fast payment

What to do if a VAT number fails

1. Check for typos on the invoice and in what you entered.
2. Ask the supplier to confirm their VAT number and send a corrected invoice.
3. Do not reclaim the VAT until you have a valid VAT invoice. If a business is not VAT registered, it should not charge VAT, and you cannot reclaim it.
4. Hold back the VAT on any unpaid invoice until the number is confirmed.
5. Keep notes of what you checked and when. If you suspect fraud, you can report it to HMRC.

The second check: validating your VAT return

When you file, HMRC's Making Tax Digital service validates your return within seconds. It checks that your software is authorised, that the period is open and has ended, that the return has not already been filed, and that the nine boxes are in the right format and add up. If anything fails, the return is rejected and does not count as filed.

The most common rejections are pence in Boxes 6 to 9, Box 3 or Box 5 not adding up, and filing for the wrong period. See what HMRC checks before accepting your VAT return for every check and how to fix each error.

How Swift VAT Pro validates your return before HMRC does

1. Your periods from HMRC: connect once with your Government Gateway sign-in, and pick the open period rather than typing dates.
2. Box 3 and Box 5 worked out for you from the figures you upload as a CSV from your spreadsheet.
3. Every box checked against HMRC's rules before anything is sent, with Boxes 6 to 9 in whole pounds.
4. Errors in plain English if HMRC rejects a return, so you know exactly what to fix.
5. Reminders by email 4 days and again 3 days before each due date, so you have time to fix any problem.

Plans start at £5 a month for one business, with a 7-day free trial and no card needed. See the pricing page for plans for accountants and agents.

Final thoughts

Check every new supplier's VAT number before you reclaim VAT on their invoices, make sure the name matches, and keep a record of what you checked. Then make sure your own return is right before it reaches HMRC. Those two checks protect the VAT you reclaim and keep your returns accepted first time.

Disclaimer: This guide gives general information, not advice for your business. If you are unsure how the rules apply to you, speak to an accountant or contact HMRC.