HMRC still hasn’t sent me my VAT number after THREE months of trading

Despite the economic uncertainty, more businesses than ever are starting up in Britain, but they are facing months of delays in getting off the ground due to tax authorities.

HMRC has been plagued by delays since the pandemic and has cut its customer service workforce from 25,000 to 19,500 in five years.

Now we have spoken to an entrepreneur who has had to wait more than three months for his VAT number and has therefore missed out on business.

Currently, HMRC tells business owners and accountants that it can take up to 40 working days, about eight weeks, to process a VAT registration request.

The tax authorities say it usually acts within this period. For some, the wait has been much longer.

Bill* registered his fire protection business at the end of February and as of the third week of May had still not heard from the IRS.

It is the first time that he has started his own business, working in social housing as a fire safety consultant, including Grenfell, but he was unable to work properly due to the wait.

“I took the opportunity this year to go out on my own… I did it without any knowledge of running a business. I hoped HMRC would support me through the process.’

The process has been far from easy. While Bill* had no problem with his self-assessment or debtor registrations, he has been waiting for his VAT number for months.

He was supposed to hear back before May 4, more than two months after he first registered, but by May 23, nothing had been heard.

Bill* said he would contact him in early May, but was told by the IRS to contact them after the deadline.

Since then, he says he’s spent more than six and a half hours on the phone waiting for someone to pick up.

“It’s almost comical now because I call them and I go about my business. I know I can come back to the kitchen and my phone was sitting there, still with music on hold.’

HMRC recently opted to close its VAT registration helpline and has been providing online guidance to entrepreneurs and accountants.

For Bill*, who registered before the helpline closed, this did little to help and he spent hours on the phone with the IRS.

‘The straw that broke the camel’s back was that after I raised my concerns on the phone, I was given a number to call someone from the registration team… I got a reply message that basically said sorry, we’ve got it now too busy. Then they hung up.

“I sat there in my office with invoices waiting to be paid, after spending another hour and a half [on the phone]feeling completely and utterly stunned.”

While HMRC might have found moving online easier, Bill* is in the dark.

‘I can accept the delay if someone gets back to me and says there’s been covid, public holidays, all that… When I go to the HMRC website and put in my reference number it says I should have heard from them by now and to get in touch.

‘Then you spend an hour and a half completely frustrated on the phone.’

What’s even more farcical is that Bill* says he filed an official complaint and was told it would take two to three weeks to process.

Due to the long wait, Bill* has missed out on business the moment he starts. While businesses can trade without a VAT number, it’s another headache to contend with when starting out.

‘A customer may have wanted to pay me £650 a day… has said they don’t want to start yet because I can’t complete the purchase because I can’t give them the VAT number. Part of that purchase is that I am subject to VAT, so that is currently on the back burner.

“I do have other work, but it probably takes away about a third of my income that I could be making right now.

“It’s not credible to my image as a start-up company – going to customers, selling my product and when it comes to your procurement exercise… I can’t provide the information they need. I don’t exactly look like a company that is running.’

Thankfully HMRC has now rectified the issue after being contacted by This Is Money.

A spokesperson said: ‘We apologize for the delay in processing their registration. The application has now been approved and a VAT number has been generated.’

However, the sorry saga does not end here. After This Is Money has notified Bill* that his application has been processed, he has yet to receive his VAT number.

After a lengthy telephone conversation, HMRC confirmed that the VAT application was completed on 25 May, but Bill* still does not have his VAT number.

Despite pressure from HMRC to bring its clients online, business owners are having to wait for confirmation of the application through the post, rather than the secure online system. HMRC says it is an anti-fraud measure.

Bill* said: ‘I am now at the mercy of Royal Mail with a significant amount of invoice value waiting to be sent.”

*Name has been changed to protect the identity of the business owner

Did you have to wait a long time for HMRC to contact you? Email to angharad.carrick@thisismoney.co.uk with HMRC in the subject line