UK: 
USA:
BOGNOR REGIS, UK – 6th JULY 2026 – Innovate Tax today announced the next evolution in VAT validation with the launch of a new capability within LimeLyte Entity Manager (LLEM) that addresses one of the biggest weaknesses in traditional VAT validation.
Every day, organisations validate millions of VAT registration numbers using APIs. If the response comes back as ‘Valid’, the assumption is usually that the customer or supplier record is correct.
Unfortunately, that isn’t always true.
A VAT registration number can be perfectly valid whilst belonging to a completely different legal entity from the one recorded in your ERPEnterprise resource planning (ERP) is a type of software that organisations use to manage main business processes. or finance system. Traditional validation solutions confirm that the VAT number exists, but they rarely determine whether it belongs to the business you think it does.
This simple but important difference has resulted in one of Innovate Tax’s core design principles:
‘Just because a VAT number is valid, doesn’t mean it’s valid for you.’
To address this challenge, Innovate Tax has developed a new Intelligent Entity Classification capability within LimeLyte Entity Manager. Rather than simply returning a similarity score between the company name held in the ERP and the name returned by the tax authority, LimeLyte analyses the differences between the two and categorises the reason for the mismatch.
This allows users to quickly distinguish between expected differences, such as abbreviations, legal suffixes or formatting, and genuine issues that require investigation.
Instead of manually reviewing thousands of individual records, similar issues can be grouped together and resolved in bulk, significantly reducing the effort required to cleanse and maintain enterprise master data, especially during master data cleansing projects.
Andrew Bohnet, Managing Director of Innovate Tax, said:
“For years the industry has focused on answering the question, ‘Is this VAT number valid?’ We believe that’s only half the story.
“The real question organisations should be asking is whether that VAT number belongs to the customer or supplier recorded in their ERP. If the answer is no, then a valid VAT number can still result in incorrect master data, operational issues and compliance risk.
“We didn’t want to build another validation APIApplication Programming Interface. APIs are an accessible way to extract and share data within and across organisations. because they simply are not good enough. We wanted to solve the problem customers are left with after the validation has finished. Our Intelligent Entity Classification capability helps users understand why records differ and allows them to resolve thousands of records in a fraction of the time.”
He added: “With our management layer, all the new records that have been identified are set to amber, once we have checked the record, we set to green – never having to check that record again, unless of course the source or tax authority data changes then it goes back to amber to be rechecked (only if it is a mismatch again)”.
Unlike traditional validation services that simply return a match score, LimeLyte Entity Manager applies intelligent classification to explain the reason for each mismatch. This provides users with meaningful information that supports faster decision making and more efficient master data governance.
The new capability forms part of Innovate Tax’s continued investment in LimeLyte Entity Manager and its vision to help organisations move beyond simple validation towards continuous tax master data governance.
