Embarrassed - VAT not paid by agency

[LondonManc]

Geraldine Arthur Frasier.

Who, GAF?

[missinggreenfields]

Was the rate agreed (and specified in the contract / schedule) as excluding or including VAT? I remember getting my first invoice paid (self-billing from timesheet) and finding that it was 17.5% higher than I was expecting because I thought I'd agreed a gross rate rather than a net rate.

You'll need to go back and check that the VAT returns filed to date correctly account for the VAT as well.

[choci]

All edits in place. I think.

Very much appreciated sir!

ty

[choci]

This thread has gone a bit meta...

OP, if I'm understanding your post correctly, you were on a self-billing arrangement with the agency, but because you hadn't provided them with evidence of your VAT registration status, the invoices they raised did not have any VAT on them (effectively, you have not charged them VAT).

This means either the invoices need to be re-issued with the correct VAT added (and the previous invoices credited via a credit note). Alternatively you may be able to send them an invoice for just the missing VAT although I'm not sure if this is the preferred way of doing things (the agency may want properly re-issued VAT invoices to support their own ability to reclaim that input VAT).

That just leaves the question of what you've been entering in your VAT returns up until this point, and are you on the flat-rate scheme?

If, for arguments sake, you've been paid £50000 over the last year, have you treated that as a gross amount in your VAT returns? If so, then you would have also under-reported the VAT owed and you may need to re-submit your VAT returns for each quarter.

You need to speak to the agency and ask them how they'd like to handle the wrongly issued invoices and speak to your accountant about sorting out the VAT return mess.

Hello, and thank you for your valuable advice..

So basically I was paying the accountancy firm (think of one of those large factory type of accountants) so they would then advise me each quarter on how much to pay HMRC.. I am on the flat rate btw.

Thank you for your input, much appreciated.

[northernladuk]

Hello, and thank you for your valuable advice..

So basically I was paying the accountancy firm (think of one of those large factory type of accountants) so they would then advise me each quarter on how much to pay HMRC.. I am on the flat rate btw.

Thank you for your input, much appreciated.

Sack them and get a Freeagent accountant. You can see exactly where you are with VAT, it tells you when it's due, it allows you to submit it directly from FA and so on...

I've got a feeling this is the tip of the iceberg.....

And I've been busting to so will finally say it. Don't make light of this. What you have is not naïve. Messing up with 10's of K of money in an extremely fundamental area of B2B for over a year is way beyond that.

[TheCyclingProgrammer]

Hello, and thank you for your valuable advice..

So basically I was paying the accountancy firm (think of one of those large factory type of accountants) so they would then advise me each quarter on how much to pay HMRC.. I am on the flat rate btw.

Thank you for your input, much appreciated.

So you've not looked at your VAT returns?

[choci]

Sack them and get a Freeagent accountant. You can see exactly where you are with VAT, it tells you when it's due, it allows you to submit it directly from FA and so on...

I've got a feeling this is the tip of the iceberg.....

And I've been busting to so will finally say it. Don't make light of this. What you have is not naïve. Messing up with 10's of K of money in an extremely fundamental area of B2B for over a year is way beyond that.

Thanks for the advice, and I assure you I am not taking any of it lightly.. I did ditch the factory accountancy firm and now I have a well recommended accountant going through everything. So in between trying to get the money back over to me, my current accountant will go through everything to see how the land lies.

Cheers.

[northernladuk]

Thanks for the advice, and I assure you I am not taking any of it lightly.. I did ditch the factory accountancy firm and now I have a well recommended accountant going through everything. So in between trying to get the money back over to me, my current accountant will go through everything to see how the land lies.

Cheers.

Worth reading through the newbie guides and everything other link on the right --> ?

See if there is anything you don't know that you don't know that's gonna catch you down the line? 24 month rule, IR35, understanding contracts and so on?

[stek]

I wouldn't mind the agent and the end clientco will kick off a bit having to tip up extra dough even if it's the tax mans anyway in the end. Messes up the cash flow etc...

[choci]

Worth reading through the newbie guides and everything other link on the right --> ?

See if there is anything you don't know that you don't know that's gonna catch you down the line? 24 month rule, IR35, understanding contracts and so on?

As I am working away from home for 3 nights each week, I'll make sure this is my focus for filling in all the gaps over the upcoming weeks.

Thanks again.