UK: What to do while you are waiting for a response to your VAT grouping registration (Notice 700/2) ?
Accordingly to the new guidance by HMRC, if you are waiting for a response to your VAT grouping application, you should treat the application as provisionally accepted on the day it is received by HMRC and account for VAT accordingly. The date of receipt should be treated as, if submitted online the date it was submitted, or if it was posted the date it should be received by HMRC through the ordinary course of post.
If you have not been issued with a group VAT registration number, you cannot charge or show VAT on your invoices until it has been assigned. However, you’ll still have to pay VAT to HMRC for this period. You should increase your prices to allow for this and tell your customers why. Once you’ve got your VAT number you can then reissue the invoice showing the VAT.
If you had a VAT registration number prior to your grouping application you should not submit returns under this number, and should follow this guidance.
While you are waiting to receive your VAT grouping registration number, you may receive:
- an automated assessment letter
- letters asking for payment of any automated assessments
- notification of a default surcharge because you have not filed your tax return
If you do, you will not be required to take any action in response to any of these notices because HMRC will automatically cancel them once your application is fully processed. HMRC will not take recovery action for any debts which come about as a result of you following this guidance, though other VAT debts may still subject to recovery actions.
Further guidance on this can be found on the HMRC’s website at section Accounting for VAT in a VAT group section 5 and Who should register for VAT (VAT Notice 700/1) section 5.1
Source: gov.uk
