If we get a supplier invoice with an invalid VAT number what course of action should we take in respect of:
- What should we, as the customer, do?
- What are the legal requirements on us?
- Should we challenge the supplier?
- Should we report to HMRC?
CIPFA has a Technical Enquiry Service that you may find useful for questions such as these. Simply email them on email@example.com.
We actually received this very same question recently, and I sourced the following answer from HMRC:
VAT Act 1994, Schedule 11 paragraph 2A allows for the making of regulations which may require invoices (to be referred to as “VAT invoices”) containing specified particulars to be provided by taxable persons supplying goods or services to other taxable persons.
Regulation 14(1)(d) of the VAT Regulations 1995 then make reference, amongst other things, to the registration number which must be displayed on the VAT Invoice.
In short and in general terms, if an Authority receives a VAT invoice with an invalid VAT number on it then it is an invalid VAT invoice and it is unable to claim the VAT. I would advise the Authority to refer back to the supplier in the first instance. It may of course be a mistake at the suppliers end such as an incorrect digit when producing an invoice, or a change in ownership of the business leading to a superseded VAT number being quoted by mistake. The matter can then be easily rectified via the production of a new invoice.
If, however, the Authority does not receive a satisfactory answer, or has reason to be believe the VAT invoice has been raised fraudulently by a person claiming to be VAT registered, then the matter should be referred to HMRC using the usual channel i.e. via the Customer Compliance Manager (CCM).
I hope that helps!