Unusual billing and VAT

[jmo21]

I find myself in quite an unusual position this month, with 2 long term clients, who I do bits and pieces of work for over the years on fixed price work.

The 2 clients need in total 3 large-ish pieces of work done, but want it all billed for by the end of this financial year. 1 bit of of work needs done by end of April, the other 2, they are happy for me to propose dates over the next 6 months to get them done by.

Happy days for me, new work is always good.

Just wondering if for my next VAT submission, it has the potential to raise a flag because of significantly higher numbers than usual (approx double a normal quarter billing)

[RonBW]

Just wondering if for my next VAT submission, it has the potential to raise a flag because of significantly higher numbers than usual (approx double a normal quarter billing)

I don't see why it would flag anything - if you took six weeks holiday / bench time, you'd be half normal and then the next quarter would be double again. Business fluctuates - as long as you have invoices to back up the VAT return then that's normal.

[jmo21]

I don't see why it would flag anything - if you took six weeks holiday / bench time, you'd be half normal and then the next quarter would be double again. Business fluctuates - as long as you have invoices to back up the VAT return then that's normal.

Thanks.

I thought that might be the case, but just wanted to check.

[vwdan]

Why does it matter anyway? I'm sure lots of things raise flags, but if you're operating legitimately then hey ho. My invoice periods are all over the place - from individual days invoiced here and there, to 30 days worth, software sales etc.

[pr1]

Why aren't you on cash accounting?

[jmo21]

Why aren't you on cash accounting?

I'm not clear why you are asking this, can you expand please?

the invoices are going to be issued and paid all the within the next few weeks. They are paying in advance, and the actual services will happen over the next 6 months.

[LondonManc]

I'm not clear why you are asking this, can you expand please?

the invoices are going to be issued and paid all the within the next few weeks. They are paying in advance, and the actual services will happen over the next 6 months.

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.)

[pr1]

I'm not clear why you are asking this, can you expand please?

the invoices are going to be issued and paid all the within the next few weeks. They are paying in advance, and the actual services will happen over the next 6 months.

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

[RonBW]

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

It's fairly irrelevant in the context of the discussion.

[pr1]

It's fairly irrelevant in the context of the discussion.

agreed