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VAT, EORI and tax

Buying a VAT-registered UK company: what to know

By the Royale Corporate team · Published · Last reviewed · 2 min read

A VAT registration belongs to the company, not to its owner, so when you buy the shares of a VAT-registered company the VAT number stays with it. You become responsible for filing its VAT returns on time, keeping digital records, and telling HMRC about changes. HMRC can cancel a registration if the company has no real intention to trade.

Key points

  • The VAT number stays with the company when its shares are sold.
  • Verify the number with HMRC’s VAT checker before buying.
  • Ask whether every VAT return so far has been filed (usually nil returns).
  • Update HMRC with new contact and bank details after the transfer.
  • Start trading or show a clear intention to trade, or HMRC may deregister the company.

Why the VAT number transfers

When you buy a shelf company you buy its shares. The company itself, the legal person registered with HMRC, does not change, so its VAT registration continues. This is different from buying a business’s assets, where the VAT number normally stays with the seller unless HMRC agrees to transfer it.

Checks before buying

  • Run the number through Check a UK VAT number: the name must match the company.
  • Ask for the VAT registration certificate and the effective date of registration.
  • Confirm all returns to date are filed and there are no penalties or debts.
  • Ask which VAT return periods (stagger) apply, so you know your first deadline.

Your duties after the transfer

  1. Update HMRC with the new contact details, principal place of business and bank account for repayments.
  2. File every VAT return on time through Making Tax Digital-compatible software, even if it is a nil return. See Making Tax Digital for VAT.
  3. Keep digital records of sales, purchases and VAT for at least 6 years.
  4. Charge VAT correctly on taxable sales and issue valid VAT invoices.

When HMRC can cancel a registration

HMRC can cancel a VAT registration if it believes the company is not making, and does not intend to make, taxable supplies. Keep evidence of your plans (contracts, supplier quotes, website, stock orders) and start trading within a reasonable time.

Official sources

This guide is general information, not legal or tax advice. Rules and fees change; check the official sources above or speak to a UK accountant before you act.

FAQs

Questions people ask

Yes. Once you control the company you can issue VAT invoices under its existing number. Update HMRC with your details promptly.
You should update the VAT registration details (contact, address, bank) through the business tax account. Changes of directors are recorded at Companies House.
Missing returns lead to penalties and estimated assessments. Do not buy a company with missing returns unless the seller files them first.
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