Secret life of the VAT number: Finding out whether a company is registered to collect excise tax proves to be far from simple, writes Mary Wilson

BY LAW, a company registered for value added tax must put its VAT number on its stationery. It is illegal for a company that is not registered to charge VAT. So why is it so difficult to check who is and who is not? Sue Whitmore from near Peterborough had some work done at her stables. When the firm that did the work put in its bill, for pounds 180 plus pounds 30 VAT, she noticed there was no VAT registration number on the bill.

'So I rang my local VAT office in Peterborough,' Miss Whitmore said. 'They told me that the Official Secrets Act precludes them from telling me whether a company is registered or not. I asked them what I should do and they told me to send them a copy of the invoice. They would then check it out and take action if necessary. That was four weeks ago and I have heard nothing from them.'

Steven Simmonite, Assistant Collector of the Peterborough office, said it had nothing to do with the secrets act, but that the office would not tell someone whether a company was registered or not.

He added: 'If someone wanted to check a number because they were filing a VAT return form, then we would tell them over the phone if the number was right or not. However, if we thought that the company being queried might be acting illegally, then we would need to look into it and would try to act covertly to check out that company.

'We would not give any information either way, because we would not want the company alerted. We would check our records and put a note on file that there had been a query.'

But the enquirer, in this case, Sue Whitmore, would be left completely in the dark. If the case were taken further, they would still not be able to get any information because it would then be sub judice. The only way the person making the enquiry would find out about it would be if the matter were reported in the newspapers.

In fact, the company that Miss Whitmore inquired about is VAT-registered.

But Mr Simmonite said: 'We have to respect the confidentiality of the companies who register their numbers and we are bound by certain obligations to them. It is not our policy to disclose information about one company to another or to an individual. We take this confidentiality very seriously, even to the extent that when issuing a new number, we will only inform them what it is through the post, not over the phone.

'I suppose, with the new Citizen's Charter, that maybe we ought to be notifying enquirers if they have good reason to ask. But at the moment, we do not.'

Even more unfair is the assumption that if a company is incorrectly charging VAT and the person billed pays it, it is up to them to take it up with that company to get it back. As far as Customs and Excise is concerned, once it has been alerted, it will demand the VAT from the company - its priority is the Government's coffers. This does not augur well for the consumer, since the company will hardly want to pay twice.

Although a company should put its number on its bills, and by not doing so implies it is not registered, the VAT office is unlikely to do anything as long as that company declares and returns VAT. Customs and Excise will only take action if it discovers VAT is being demanded and then not declared.

(Photograph omitted)