Will HMRC’s new service speed up VAT registrations?

HMRC rolled out the VAT Registration Service (VRS) to agents and accountants from 1 August as part of the ongoing Making Tax Digital (MT|D) drive. The system is intended to speed up the VAT registration process as well as enhance security.

Accountants note the following changes:

•  Every taxpayer/VAT-registered business will be automatically registered for MTD under the new system.

•  Real-time checks carried out on details and information entered.

•  More details are required during registration such as Corporation Tax information and director details.

So what do accountants think? Will the new system speed up VAT registrations? And what are the implications of the new system around workload and service delivery?

The new system requires a lot more information and detail

Adam Lloyd, Tax Manager, Monahans

The new process is not dissimilar to the old registration process. You’re still directed to the Government Gateway and then required to answer questions to establish eligibility for an online application.

The process is no better or worse than before. However, one difference is the uploading of documents. Previously you were able to upload additional information as part of the process, now these need to be emailed across separately. Whilst this can be slightly more time-consuming, it does mean that you are not forced to pause the entire process if there are any issues with sourcing additional information.

The main challenge however, is the amount of information the system requires, and often results in a lot of unnecessary back and forth with the client. As usual there are also initial glitches that are still being ironed out.

Next steps:  Follow the links precisely. If you end up logged in as anything other than an agent you will get asked security questions you won’t know the answer to.

Verdict: System isn’t too different, but a lot more information and detail is required.

Teething problems are causing delays and increased workloads, but real-time functionality offers benefits

Alison Horner, Partner, Indirect Tax, Macintyre Hudson

The new system is similar to the old one but requires more data such as Corporation Tax details and director details. It also links with different tax systems such as NI numbers and checks in real time.

However, there are many teething problems which means that workloads for accountants have significantly increased.

These include issues with saving data and connection issues with the ASA (Agents Service Account) resulting in very long delays. There are also problems for overseas businesses wishing to register and the security protocols required by HMRC. Questions asked by the application process can result in dead ends for certain partnerships and businesses not yet trading. The system works well for simple VAT registrations but not for complex situations. HMRC are urgently reviewing this process and working closely with governing bodies.

Finally the old process had a document upload functionality but now, additional documents need to be sent by email or post. It is well-known that HMRC are having many problems with turnaround of post so it seems a very big step backwards to take this function away.

Right now, the new system is actually slowing things down. Perhaps when all the recommended changes are implemented then the real time data checking will help speed things up.

Next steps:

• Have all the information you need to hand- draft registrations are only available for 7 days.
• Ensure the client is ready to approve and can respond to the HMRC security text.
• Increased involvement with the client to work together is also essential.
• Feedback to HMRC about any issues.

Verdict: Teething problems are causing delays and workload issues but real-time functionality will hopefully improve things in the long-run.

Processing time has increased from 30 days to 8 weeks while removal of some key functions makes the new system more cumbersome

Harshjeet Vaghani, Tax Advisor and Trainee, Oury Clark

There are no major changes to the type of information collected under the new system. However, the UTR number is now mandatory for VAT registration applications for UK entities.

There are some pros and cons of the new system:

• The benefit under VRS is that it will automatically register the taxpayer for MTD (Making Tax Digital) once the VAT number is allocated.

• However, the VRS does not allow the user to save the draft application and only allows one to saves the YES/NO questions which is cumbersome.

• The is also no longer the option to upload documents. Instead, documents have to be emailed or sent by post which is quite regressive.

• Additional checks on VAT registration application for a non-established taxable person takes more time to get than for a UK established entity.

• Progress of the applications filed is not visible on VRS after 7 days.

In my view, the new service has not sped up VAT registrations. It’s actually taking longer. Processing time has increased from 30 days to 8 weeks.

Overall, I preferred the legacy service (old portal) as it was easier to navigate and much more efficient.

Next steps: The new system requires a lot of patience while initial teething issues are ironed out, so be prepared for longer processing times.

Verdict: Processing time has increased from 30 days to 8 weeks and the removal of some key functionality makes new system more cumbersome.

Differences are only superficial, but benefits are yet to be seen

Greg Timson, Chief Accountant, inniAccounts

For the most part, there are only superficial differences between the two systems and their forms: it’s presented differently but the content is the same.

However, we understand that the UTR number is now required for new companies which could cause delays. It also means we can’t register for all taxes at the same time – for example, we now have to wait for VAT.

At the moment, I can’t really see the incremental benefit of this new system – yet. The old system worked, but perhaps in future there will be benefits in terms of streamlining processes in the background. For instance, it could speed up HMRC processing times.

Next steps: Don’t worry about the changed look to the form, generally content is the same and it works well. As ever, have all your company and personal details to hand when you start and ensure you have the UTR number.

Verdict: There are only superficial differences between the new and old system but benefits of the new system are yet to be seen.

Annie Makoff is a freelance journalist and editor.