Why has HMRC refused my VAT registration?

HMRC won't register you for VAT if it isn't convinced you're actually trading, or if the evidence you've provided doesn't stand up to scrutiny.

This usually follows a pre-registration verification check, where an officer asks for proof of trading activity, such as contracts, invoices, a business bank account or website, before allowing the registration through.

A refusal isn't necessarily final. It's often a request for better evidence dressed up as a rejection, and resubmitting with stronger proof frequently resolves it.

Schedule 1 VATA 1994 sets out who must, and who may, register for VAT, based on taxable turnover and genuine business activity. HMRC has to be satisfied the applicant is making or intends to make taxable supplies.

Schedule 11 VATA 1994 gives HMRC power to require the evidence it needs to check an application, including invoices, contracts and bank records.

If HMRC refuses, that's a decision you can challenge. Section 83 VATA 1994 lists registration decisions among those you can appeal to the tribunal, and section 49 lets you ask for an internal review first.

Without a VAT number, you can't charge VAT, reclaim input tax, or in some cases fulfil contracts with VAT-registered customers who expect a valid invoice. This can stall trading altogether.

If your company has crossed the compulsory registration threshold, a refusal doesn't remove the obligation to register; it just means HMRC wants more before it processes it. You still need to keep records and account for VAT from your effective date of registration once it's confirmed.

Directors of new companies, or those trading through a change of structure, are the most common target for these checks because there's less trading history to verify.

The direct cost is delay: you can't issue valid VAT invoices, and any VAT you've charged in the meantime needs correcting once registration is confirmed.

If the refusal stems from HMRC suspecting the business isn't genuine, and it later transpires you should have registered earlier, penalties for late notification can also apply.

Growth plan clients get free tax investigation insurance included, covering professional fees if a registration dispute develops into a wider check. Details are at /fees.

Don't submit a bare application with no supporting evidence and expect HMRC to fill in the gaps; it won't, it will simply reject it.

Don't ignore a refusal letter. There's a time limit to challenge it, and missing that window can force you to start again from scratch.

Don't guess your effective date of registration. Get it right first time, because errors here cascade into invoicing and VAT return problems later.