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Unusual billing and VAT

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    #11
    I'm curious to know what you would've done had we said "yes". You're not about to decline the work, I assume. There's nothing you can do about HMRC's risk assessment process, but this would be a pretty weak indicator, as most businesses have fluctuating income. Indeed, you can't get much more consistent w/r to income than employment.

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      #12
      Originally posted by pr1 View Post
      If that's the case (that they'll definitely pay it within a few weeks i.e. within the same quarter) - it probably won't matter

      On invoice accounting you'd have to pay the 6 months of VAT up front, which might affect your cash flow (it at least would mean you'd take money out of your business savings account) - could cause you problems if they then changed their mind and you had to rescind the invoices

      On cash accounting you wait until the invoices are paid to pay the VAT, there's no reason (that I have ever been convinced by) for any contractor turning over less than £1.35m/year not to be on it - which probably covers all of us... except maybe MrMarkyMark
      Got you.

      Yep, I am on cash accounting, but I didn't understand the relevance. I didn't mention it in the original post, but yes, they want billed and to pay before the end of financial year.

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        #13
        Originally posted by jamesbrown View Post
        I'm curious to know what you would've done had we said "yes". You're not about to decline the work, I assume. There's nothing you can do about HMRC's risk assessment process, but this would be a pretty weak indicator, as most businesses have fluctuating income. Indeed, you can't get much more consistent w/r to income than employment.
        haha, of course not!!

        just wondered if it might cause any issues.

        It is a v good position to be in.

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          #14
          Originally posted by jmo21 View Post
          haha, of course not!!

          just wondered if it might cause any issues.

          It is a v good position to be in.
          Yes, I really wouldn't worry about it. I've had VAT returns that vary massively and it's a non-issue. Now, if I could only get my accountants to understand the VAT reverse charge... It's the accuracy and internal consistency of the return that you want to worry about.

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            #15
            Originally posted by LondonManc View Post
            Happy days indeed.

            As others have said, as long as you've got it documented and the bank statements to prove that you've been paid, then all is good (suits you to be paid before April to for the VAT collection boost.)
            Think there's a rule against doing that generally though, which might "raise a flag" if you suddenly invoiced for 6 months worth of work (on invoice accounting) the month before you come off the FRS scheme

            Can't remember the name of it

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              #16
              Originally posted by pr1 View Post
              Think there's a rule against doing that generally though, which might "raise a flag" if you suddenly invoiced for 6 months worth of work (on invoice accounting) the month before you come off the FRS scheme

              Can't remember the name of it
              Who said he's coming off the scheme? May as well stay on it for the next two reporting periods at least.
              The greatest trick the devil ever pulled was convincing the world that he didn't exist

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                #17
                Originally posted by LondonManc View Post
                Who said he's coming off the scheme? May as well stay on it for the next two reporting periods at least.
                If he's getting paying the VAT received on the next 6 months of invoices today, why wouldn't he then come off the scheme given the 16.5% change? That's 6 months of accountancy payments he can now claim the VAT back on, for starters

                or am I missing something?

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                  #18
                  I personally consider highly variable income as a good indicator of non-standard (9-5 x 5) working practices. I.e. I am not a permie.
                  http://www.cih.org/news-article/disp...housing_market

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                    #19
                    Originally posted by PurpleGorilla View Post
                    I personally consider highly variable income as a good indicator of non-standard (9-5 x 5) working practices. I.e. I am not a permie.
                    +1, absolutely
                    The Chunt of Chunts.

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                      #20
                      I am FD for a local charity, and last quarter we had a £17k Vat refund due (usually pay £2-3k), I was expecting an Inspection.

                      In the end we just got a "can you explain, please show workings, copies of 6 biggest invoices". refund was posted a week or so later.

                      As others have said, if it's just normal business fluctuation I wouldn't stress about it.
                      Last edited by Pherlopolus; 1 March 2017, 13:18.

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