No this isn't a case of having a dig at accountants. But I was genuinely surprised to learn that so many delays are caused by VAT registration applications submitted by accountants.
I was recently reading the minutes of the Joint VAT Consultative Committee (or JVCC for short) from the meeting held in September last year. The JVCC is a group of representatives from various professional organisations (including the ICEAW and the VAT Practitioners’ Group) and HMRC which meets to discuss various practical issues about VAT.
One of the subjects that regularly comes up for discussion is VAT registration and specifically how well the VAT Registration Service is performing. Any of us who have submitted applications for clients over recent years will be well aware of the significant delays with timescales of 5 or 6 weeks even for routine applications.
To be fair to HMRC, they have put a lot of effort into speeding things up over recent years. Last year around 70% of applications were processed within 12 working days and this year their target is to reduce the timescale to 10 working days. But what surprised me was the fact that the applications themselves caused delays in a very significant proportion of applications submitted by accountants for their clients (anything from 46% to 52% in one monthly sample). These included requiring clarification about the nature of the business activity or the principal place of business (“PPOB”).
What's so difficult about it all?
Now we all know that delays could be caused by a number of factors. Perhaps the officer processing the form misreads the information or is inexperienced and gets things wrong. But either way, these figures are ridiculously high and there’s really no excuse for accountants to be getting these things wrong. The queries range from the address to the nature of the business, not exactly difficult questions!
I know from experience that clients often ask their accountants to register them at the accountant’s address. Sometimes there are good reasons for this – for example if the business is carried on at a number of places and all of the accounting function is carried on at the accountants’ offices. But this still isn’t the PPOB. It’s where the business is physically carried out and in the case of several locations, then it should be the place where the business is managed, which is usually where the directors and management team are located.
What I always recommend is that if you are in any doubt about the PPOB or any other issues relating to the application, then complete the form as best you can and explain the circumstances in a covering letter. This should at least enable the officer processing the application to make an informed decision and reduce delays. Despite HMRC’s best efforts, there will always be situations when applications can’t be turned round within the target timescale, but there really is no excuse for qualified accountants or consultants to cause delays by making such obvious errors!
Okay, I'd better stop before I start getting hate mail from accountants!
Marie