Accountants have back dated VAT effective registration date

[max00d]

Hello, - after a couple of months of trading as a limited company I got an accountant. I then asked the accounts to register me for the fixed rate VAT scheme and this was done voluntary at this point as my turnover was not over the threshold.

I have now got my VAT certificate and the effective date on the certificate shows the same date as I incorporated the company (september'14). This was not the instructions that I gave to my accountant.

They have now told me that this was the date that HMRC chose for me (??!!). I believe that this is error made by the accountants and they they should sort this out for me. Due to the nature of my business I cannot go back now and bill clients for project that have done in the months before I asked them to register me (I asked them to register me in mid December'14). We are talking about ~£25k during this period.

Has anyone else had this happen to them? What do I do? Help...

[TheCyclingProgrammer]

Are your clients not VAT a registered businesses? What is it about the nature of your business at means you can't re-issue VAT invoices to them?

Unfortunately a bit of googling around has thrown up links, like the following, which would seem to suggest that unless you can show HMRC have made an error, the effective VAT a registration date cannot be changed.

VAT registration date error and severe consequences | AccountingWEB

(Although reading the comments there may be provision for changing the EDR if there has been a genuine error).

Somebody has made a cock-up. If it was HMRC you should be able to get this fixed. If it was your accountant, then unfortunately you're going to have to try and settle this with them. You have little choice but to account for VAT on your previous sales and if you can't pass the VAT costs on to your clients, you're going to have to treat your sales to date as gross and pay the VAT yourself.

[TheFaQQer]

Due to the nature of my business I cannot go back now and bill clients for project that have done in the months before I asked them to register me (I asked them to register me in mid December'14). We are talking about ~£25k during this period.

Why can't you invoice the clients for the VAT? If they are VAT registered themselves, then it makes no difference because they claim it back anyway.

What do I do? Help...

1. Argue with HMRC and prove that they made a mistake in your registration.
2. Invoice the client and get the money from them
3. Invoice the client, get rejected, argue it with the accountant and get them to stump up for their mistake
4. Invoice the client, get rejected, argue it with the accountant, lose the argument and end up paying the VAT yourself
5. Don't bother invoicing the client for the VAT, argue it with the accountant and get them to stump up for their mistake
6. Don't bother invoicing the client for the VAT, argue it with the accountant, lose the argument and end up paying the VAT yourself

Those are the only options available to you here - I'd start at number 1 and work downwards, but don't be surprised if you end up at either 4 or 6.

[Forbes Young]

Hello, - after a couple of months of trading as a limited company I got an accountant. I then asked the accounts to register me for the fixed rate VAT scheme and this was done voluntary at this point as my turnover was not over the threshold.

I have now got my VAT certificate and the effective date on the certificate shows the same date as I incorporated the company (september'14). This was not the instructions that I gave to my accountant.

They have now told me that this was the date that HMRC chose for me (??!!). I believe that this is error made by the accountants and they they should sort this out for me. Due to the nature of my business I cannot go back now and bill clients for project that have done in the months before I asked them to register me (I asked them to register me in mid December'14). We are talking about ~£25k during this period.

Has anyone else had this happen to them? What do I do? Help...

We register nearly all our new company clients for VAT shortly after we form the company for them. HMRC don't choose a date - on the application (online) we use, the date for VAT Registration and FRS registration needs to be specified on the application.

Suggest you contact your company's client about the sales invoicing problem. For instance are they able to accept VAT-only invoices for the sales invoices you have issued to them without VAT included?

Graeme Bennett ACMA MBA

[max00d]

We register nearly all our new company clients for VAT shortly after we form the company for them. HMRC don't choose a date - on the application (online) we use, the date for VAT Registration and FRS registration needs to be specified on the application.

Thanks for the info - looks like I'm looking for a new accountant. If they make an error that simple how can I trust them with a tax return.

Argue with HMRC and prove that they made a mistake in your registration.
Invoice the client and get the money from them
Invoice the client, get rejected, argue it with the accountant and get them to stump up for their mistake
Invoice the client, get rejected, argue it with the accountant, lose the argument and end up paying the VAT yourself
Don't bother invoicing the client for the VAT, argue it with the accountant and get them to stump up for their mistake
Don't bother invoicing the client for the VAT, argue it with the accountant, lose the argument and end up paying the VAT yourself

Nice logical breakdown - thanks. Hoping it doesnt come to either 4 or 6!

[TheCyclingProgrammer]

max00d - I'm still curious as to why your clients won't accept a new VAT invoice? Have you asked?

[TheFaQQer]

Thanks for the info - looks like I'm looking for a new accountant. If they make an error that simple how can I trust them with a tax return.

On the plus side - at least your trading year and VAT returns coincide. Mine is a month out, and before I moved to InTouch it was a pain at the end of the year because the accountant had all the paperwork, including the invoices that I needed to use for calculating the next VAT return.

[AMH]

Why can't you invoice the clients for the VAT? If they are VAT registered themselves, then it makes no difference because they claim it back anyway.

THIS^
I backdated & my agency didnt question it once I explained to them.

[AMH]

also... dont forget your 1% discount in the first year

[malvolio]

On the plus side - at least your trading year and VAT returns coincide. Mine is a month out, and before I moved to InTouch it was a pain at the end of the year because the accountant had all the paperwork, including the invoices that I needed to use for calculating the next VAT return.

Why?