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VAT: Registration

Volume 465: debated on Tuesday 23 October 2007

To ask the Chancellor of the Exchequer how many and what proportion of VAT registration applications have been processed within the target time in 2007-08. (153424)

[holding answer 8 October 2007]: The number and proportion of VAT registration applications processed within the target time in 2007-08 is;

2007

Number within 14 days

Proportion (percentage) within 14 days

January

4,671

21

February

4,506

20

March

4,022

19

April

1,493

7

May

1,883

7.5

June

3,174

17

July

3,884

13

HMRC recognise that in recent months there have been some unacceptable delays for genuine businesses. Several factors have contributed to this, including an increase in the threat of fraud, an increase in the number of applications, and both resource and IT pressures. However, HMRC have put improvement measures in place and expect that a real upturn will be visible later this year.

To ask the Chancellor of the Exchequer what the average processing time was for VAT registration applications for each of the VAT registration units in the latest period for which figures are available. (153425)

[holding answer 8 October 2007]: The average processing time for VAT applications for each of the VAT registration sites at 31 July 2007 was;

Registration site

Average time taken (in days)

Wolverhampton

32

Grimsby

38

Newry

52

Carmarthen

43

HMRC has taken steps to address the imbalance in processing times across sites and is transferring work between locations to overcome this. Since 1 October 2007, all new applications have also been handled at Wolverhampton and the relatively faster handling times there should have a significant impact on the overall average time taken.

To ask the Chancellor of the Exchequer pursuant to the answer of 23 July 2007, Official Report, columns 665-66W, on VAT: registration, how many and what proportion of VAT registration applications were processed within 15 working days in 2006-07. (154438)

[holding answer 8 October 2007]: The number and proportion of VAT registration application processed within 15 working days in 2006-07 was;

2006-07

Number/percentage

Number processed within 15 working days

188,216

Percentage processed within 15 working days

66

HMRC recognise that in recent months there have been some unacceptable delays for genuine businesses. Several factors have contributed to this, including an increase in the threat of fraud, an increase in the numbers of applications, and both resource and IT pressures. However, HMRC have put improvement measures in place and expect that a real upturn will be visible later this year.

To ask the Chancellor of the Exchequer how many applications for VAT registration were processed within (a) 14, (b) 30, (c) 60, (d) 90 and (e) more than 90 days after their submission to HM Revenue and Customs in the 12 month period ending 31 March. (154440)

Revenue and Customs do not separately record the number of VAT registration applications processed within 90 or more days after their submission. The number processed within (a) 14, (b) 30 and (c) 60 days after their submission for the financial year ending 31 March 2007 are as follows;

Applications processed within

Total number of applications

14 days

77,568

30 days

242,474

60 days

281,690

HMRC recognise that in recent months there have been some unacceptable delays for genuine businesses. Several factors have contributed to this, including an increase in the threat of fraud, an increase in the numbers of applications, and both resource and IT pressures. However, HMRC have put improvement measures in place and expect that a real upturn will be visible later this year.

To ask the Chancellor of the Exchequer what the reasons are for the time taken to provide new businesses with a VAT registration number; what the performance against the eight week target period (a) has been in the last period for which figures are available and (b) is expected to be over the next 12 months; and if he will make a statement. (158996)

HM Revenue and Customs (HMRC) receive over 285,000 VAT registration applications each year and have a target of clearing complete and low risk applications within 14 days following receipt. The Government recognise that, over recent months, HMRC have fallen short of this target.

Several factors have contributed to the increased processing times. VAT registration is the entry point to serious frauds such as Missing Trader Intra-Community (MTIC) fraud, which reduced VAT receipts by an estimated £2 billion to £3 billion in 2005-06 and represents a very serious and sustained attack by organised criminal networks on the UK's VAT system. HMRC has taken steps to prevent such abuse of the VAT system, including a range of pre-registration checks, which last year weeded out over 7,000 fraudulent applications.

Earlier this year HMRC also saw a peak in the number of VAT registration applications as some businesses tried to circumvent certain anti-avoidance measures introduced in Budget 2007. As a consequence the operational pressures on HMRC have intensified and work continues to manage the response to this pressure.

HMRC have a 14-day target for clearing complete and low risk applications rather than an eight-week target period. For 2007-08 the performance against that target is as follows:

Month (2007)

Number within 14 days

Proportion (percentage) within 14 days

April

1,493

7

May

1,883

7.5

June

3,174

17

July

3,884

13

August

3,997

14.4

September

5,686

19.75

HMRC has put in place a number of specific measures designed to improve registration processing times. It has made immediate improvements to speed up the initial vetting of applications, and is targeting its risk checks more closely on the highest risk applications, so as to minimise disruption to legitimate applications. Additional processing staff have been recruited, more of the existing staff are now dealing with VAT registration work and IT challenges have been addressed with improvements planned over coming months.

HMRC anticipate that these steps will provide significant additional processing capacity. However the lead-time for some changes, including training of new staff, means that significant improvement is not expected until later in the year. HMRC recognises that performance needs to continue to improve and will continue to work hard to reduce VAT registration delay.