It’s a super common question and if you’ve ever hit the VAT threshold, applied for VAT and then had a client ask for an invoice, you know exactly why. Cue the panic. “I’ve applied for VAT, but I don’t have my VAT number yet, can I charge VAT?”
The short answer is yes but with some important caveats. Don’t worry, this isn’t about making a mistake, it’s about understanding the rules and handling things the right way.
Why it happens
Many small business owners get nervous about “doing it wrong.” You’re suddenly dealing with HMRC, VAT returns and paperwork that feels more complicated than running your business itself.
The truth is, this is really common. It’s the kind of real-world VAT question that doesn’t always get covered clearly in textbooks. You’re not alone and the good news is there’s a simple, practical solution.
The rule (plain English)
Here’s the simple breakdown:
- You can charge VAT from your effective date of registration. This is the date HMRC says your business must start accounting for VAT, usually the date you cross the VAT threshold or your chosen registration date.
- You cannot issue a VAT invoice until your VAT number is confirmed. HMRC needs your official VAT number on the invoice. Until you have it, a VAT invoice isn’t valid.
Think of it like this: you owe VAT from the registration date, but you can’t show it officially on an invoice until HMRC gives you the number.
What NOT to do
There are a few common mistakes to avoid:
- Don’t charge VAT without a VAT number. Even if you’re registered “in principle,” an invoice without a VAT number is technically invalid.
- Don’t guess your VAT number or write “VAT applied for.” That might seem harmless, but it could cause problems for both you and your client. HMRC expects accurate information.
The best solution
The simplest, safest approach is a two-step process:
- Send a net invoice now. Include your usual charges without VAT. Clearly mark it as excluding VAT.
- Issue a VAT-only invoice later. Once your VAT number is confirmed, send a separate invoice for the VAT due.
Here’s an example of clear wording you could use on your first invoice:
Invoice total (excluding VAT): £1,000
VAT to be added once VAT registration is confirmed
And then your follow-up VAT invoice could read:
VAT due at [effective registration date]: £200
VAT number: [your new VAT number]
This keeps everything transparent for your client and compliant for HMRC.
Reassurance
The good news? HMRC are used to this scenario. It happens all the time and as long as you follow the two-step approach, it’s completely fixable.
Remember, real-world business doesn’t always follow the textbook perfectly. The key is clear communication and proper record-keeping. You can do this and your clients and HMRC will understand.
Takeaway:
- You can account for VAT from your registration date, but your invoice can’t show VAT until you have your number.
- Use a net invoice first and a VAT-only invoice later.
- Be clear with your wording and keep accurate records.
Doing it this way keeps you compliant, professional and most importantly sane!
Have a question regarding VAT or need some accountancy help? Give us a call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk. You can also book a free 20-minute call with Yarka – https://calendly.com/yarka-ssa/20min
