Reply to: Agency wants to see VAT Certificate...

[BoredBloke]

I had the same request from my agency a couple of weeks ago. I phoned up HMRC to ask whether they had any right to ask for it and they said no, an invoice with a VAT number is sufficient.

If a company isn't VAT registered, but charges VAT on an invoice, then it is that company who are breaking the law, not the company who paid the invoice.

I had a pleb from the agency try to convince me otherwise but I told him where to go. He initially said they wouldn't pay any VAT until I send a copy of the certificate. I pointed out the legality of this on their part, quoting the call reference number Hector gave me when I called to ask whether they had any right to see the certificate.

So I would tell them to **** off. Pisses me off when agencies try to obtain information they have no need to see.

Can you imagine if every company who bought anything off another company could refuse to pay until they saw a VAT certificate?

I had an agency threaten to withold my VAT until I showed them my Vat Cert. I phoned the Vat people and they told me that they were allowed to do this. I asked if it was ok for me to withold the VAT from the diesel I bought on the basis that I hadn't seen the one relating to BP. He said that I wasn't allowed to do that!

It bugs me the amount of hoops we have to jump through like this. When I buy services off a 3rd party I don't ask for a VAT cert, certificate of incorporation, a copy of their insurance docs. On this contract I even had to spend £20 to get some kind of criminal disclosure thing.

[Epiphone]

The answer I used to get, for them wanting copies of the certificates "we have an audit coming up in a couple of days, and we want everything to be in order"

LOL The old "we have an audit coming up in a couple of days, and we want everything to be in order" Hays line. They must have audits every day of the year.

Scarily, other agencies are picking up this line and trying it on too.

[WindyAnna]

SOX applies to any UK company that has a listing on the USA stock exchanges, usually through some subsidiary. Doesn't add any value (quite the reverse in fact) but tends to pop up in the most unexpecteed places!

The company in question didn't have a US listing, subsidiary or any reason to aim for SOX compliance! Have done SOX projects before and when they mentioned it I did tell them it was nuts but it made them happy!

[malvolio]

SOX applies to any UK company that has a listing on the USA stock exchanges, usually through some subsidiary. Doesn't add any value (quite the reverse in fact) but tends to pop up in the most unexpecteed places!

[WindyAnna]

Most of the clients I have worked for have an AP policy where they want to see a copy of a company VAT reg before they will set them up as a vendor.

This is, as PP said, because putting a valid VAT number on an invoice is no evidence that they are actually registered for VAT and haven't just copied someone else's number. The company is responsible for ensuring that the suppliers are really VAT registered - so this is part of the reason. The other reason is to help validate that the company are above board, if a company are going to try to get away with an invalid VAT code then there's always the chance they are doing something else dodgy. It isn't by any means foolproof but it is an extra level of checking.

I did work for one client who insisted on it for SOX reasons but I can't see quite where SOX would apply for a UK customer/supplier relationship!

[tim123]

What rules are you referring to incidentally Tim? HMRCs? The agency?

The ones that HRMC have brought in to stop carousel fraud. HRMC expect that in C2C transactions the payer check that the person they are paying *really* is VAT registered.

Having a VAT number proves absolutely nothing as the other party could have made it up. There is a VAT number checker available, but that only checks that the number is validaly formed, it does not check that it links to a valid registration.

I have been showing my Certificate to agencies for the last 20 years. I really don't understand why you have an issue with this, even if there we no good reasion for it, which there is.

tim

[Ardesco]

I have doubled checked and all I have come up with is this:

19.7.1 General
You must keep all invoices for standard-rated, reduced-rated and zero-rated supplies that you receive for your business. They must be kept in such a way that, given the invoice date and the supplier’s name, they can be easily produced to us.
You cannot use an invoice which is marked “pro-forma” or “THIS IS NOT A TAX INVOICE” as evidence for reclaiming input tax (see paragraph 17.3).
Only a registered person can issue a VAT invoice. There are financial penalties for the unauthorised issue of VAT invoices. If you receive an invoice from an unregistered person and knowingly use it to reclaim VAT, you are committing an offence.
You should have no problem finding out from your suppliers whether they are registered. If you are in any doubt or you are unsure about the validity of a supplier’s VAT invoice, you should telephone our National Advice Service.
In your own interest, you should obtain and retain VAT invoices. Without them, you may not be able to reclaim VAT you have been charged.

I assume they are just hassling for a copy of your VAT invoice because it is easier than phoning up HMRC and they can then prove that they did not know that you were unregistered if it all goes wrong.


I can see why they do it, I would rather have a physical paper copy as evidence rather than some the word of some HMRC helldesk monkey.

[Kylie4485]

What I coincidence! I must have been dealing with the same agencies at the same time because I have been told exactly the same thing.

I was also told by one agency their fingers had been burned by a contractor who never registered for VAT but invoiced for it then scarpered back to Australia when rumbled. They wanted to see VAT certificates simply 'on principle'. Can't help but respect the honesty.

Oh right, what Umbrella company are you working for? (Sorry I can't be bothered to go back through all of your 1560 posts to find out) from your user name I can make a wild guess who you are! But I wouldn't have thought that person would have dealt with admin duties such as sending VAT certificates.

[BrowneIssue]

The answer I used to get, for them wanting copies of the certificates "we have an audit coming up in a couple of days, and we want everything to be in order"

What I coincidence! I must have been dealing with the same agencies at the same time because I have been told exactly the same thing.

I was also told by one agency their fingers had been burned by a contractor who never registered for VAT but invoiced for it then scarpered back to Australia when rumbled. They wanted to see VAT certificates simply 'on principle'. Can't help but respect the honesty.

[scaramanga]

I believe that Hector was wrong here.

The rules require the agency to check that you are registered and despite what hector said, having the number on the invoice is most definately not enough.

tim

A junior member of staff at HMRC making a mistake? Surely not...

Suggest the OP phones the VAT helpline and asks himself. Maybe he will get a completely different answer to me. If they get the same answer, the call reference can be quoted to the agency. The woman I got said I could pass this on and the agency could phone up to confirm. 0845 010 9000 is the number.

What rules are you referring to incidentally Tim? HMRCs? The agency?

[tim123]

I had the same request from my agency a couple of weeks ago. I phoned up HMRC to ask whether they had any right to ask for it and they said no, an invoice with a VAT number is sufficient.

If a company isn't VAT registered, but charges VAT on an invoice, then it is that company who are breaking the law, not the company who paid the invoice.

I had a pleb from the agency try to convince me otherwise but I told him where to go. He initially said they wouldn't pay any VAT until I send a copy of the certificate. I pointed out the legality of this on their part, quoting the call reference number Hector gave me when I called to ask whether they had any right to see the certificate.

I believe that Hector was wrong here.

The rules require the agency to check that you are registered and despite what hector said, having the number on the invoice is most definately not enough.

tim

[Kylie4485]

The answer I used to get, for them wanting copies of the certificates "we have an audit coming up in a couple of days, and we want everything to be in order"

[scaramanga]

Surely if you pay VAT to somebody who's giving you a duff VAT number, you can't then claim that back from HMRC ?

Presumably at that point HMRC would commence proceedings against the company raising the invoice illegally.

Not sure to be honest, all I did was phoned up HMRC and asked pretty much word for word what the OP asked. I was told I was under no obligation to provide the agency with a copy of the certificate and putting the number on an invoice is sufficient.

[VectraMan]

Surely if you pay VAT to somebody who's giving you a duff VAT number, you can't then claim that back from HMRC ?

They'd only find out if you were audited, and then it wouldn't be you comitting the fraud. I think you'd get to keep the VAT you reclaimed, and the other party would be in the tulip for not paying VAT.

I can't see why they need it either, but what's the big deal?

[Kylie4485]

Umbrella companies send their VAT certificate's as standard to all new agencies they work with (guessing it the same with LTD comp)