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Why HMRC Rejects VAT Registrations

Published by Prerana
Posted Date: June 8, 2024 , Modified Date: June 7, 2024

HM Revenue and Customs (HMRC) rejected 17% of VAT registration applications that businesses made for last year. These rejections relating to VAT registration resulted from multiple factors that we are taking a look at here.

The Scenario of VAT Registration Rejection

Businesses, both large and small, made a total of 314,000 VAT applications last year. Of those, 261,000 VAT registration applications were accepted, while 52,000 applications were deemed to have failed to meet the criteria set out by the HMRC.

vat registration threshold

According to experts, HMRC is taking ‘excessive caution’ in VAT applications, especially due to an increase in VAT fraud cases.

What Caused the VAT Application to Fail?

The main reason for the VAT registration application failure is incorrect information on the VAT registration form. Here is a detailed breakdown of the reasons:

  • Incorrect Information – Any incorrect information, including personal details of company directors, addresses, business descriptions, and financial details can be a major reason for HMRC to reject your VAT application.
  • Misunderstanding – Any small inconsistency in the description of business activities can raise red flags for the HMRC and be a reason for the whole application to get rejected.
  • HMRC Telephone Service – HMRC’s customer service operator or telephone service is not meeting target levels as an average individual must wait over 25 minutes to connect with a VAT officer in order to get assistance with the VAT registration process.
  • Additional Information Request – Many have misconceptions about withdrawing their application when HMRC asks for additional information, which could be a reason for the numeral increase of VAT application rejection.

As the VAT registration assistance provided by HMRC may not be available. It is better to get guidance from a professional tax advisor for the VAT registration process.


HMRC has rejected 17% of the VAT registration applications from last year. Some of the reasons for the applications get rejected are incorrect information, misunderstandings, HMRC’s poor telephone service, and more. So, it is better to get professional help rather than the hassle of starting from scratch.

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