HMRC criticised for VAT registration data

Date: 4th August 2008

HM Revenue & Customs (HMRC) has been accused of misleading people about how long it takes businesses to register for VAT.

The minutes of the Joint VAT Consultative Committee meeting from earlier in the year suggest that HMRC opted to cap the length of wait for VAT registrations at 60 days when it produced its figures on the issue.

Shadow treasury minister David Gauke told Taxation that this meant the figures produced by HMRC about VAT registration were "seriously misleading and likely to be a substantial underestimate".

However, HMRC defended itself in a statement, saying: "HMRC has been consistently clear about the basis on which statistics on VAT registration are calculated, including that there have been limitations in the past.

"In recent months we have made substantial improvements to the processing of registration applications and this has enhanced the quality of the data and statistics available on VAT registrations."

Recently, the Institute for Fiscal Studies suggested that the government should consider applying a standard rate of VAT to all items.