Plus VAT or not plus VAT?

[northernladuk]

Actually people are.

This makes me glum

[SueEllen]

This makes me glum

Once you recognise that a minority of people are just generally thick while everyone else is just thick in a few areas, it makes life a lot easier.

I suppose we could all be more helpful by showing him how to catch fish rather than giving one or whatever e.g. An introduction to VAT - Accountants UK - SJD Accountancyor more comprehensively https://www.gov.uk/business-tax/vat

[malvolio]

Sorry guys, but these are basics, and the rules clearly stated.

Initially raise invoices marked "VAT Registration applied for" for the non-VAT value.

When your registration comes through, raise all subsequent invoices (for anything) with VAT Added at the prevailing rate and raise a single invoice for each client (assuming more than one exists) for the VAT now outstanding on the invoices raised to date, quoting the relevant reference numbers.

You don't need to re-issue anything, the VAT liability is back-dated to the day you asked to be registered and FRS works perfectly happily if you're using it.

And before anyone asks, if the VAT rate changes you have to change the applicable rate at the VAT Point of the original invoice, which, for continuing supply of services, is the issue date, otherwise it's the date of delivery.

Hope that's clear...

[TheCyclingProgrammer]

Mal: you say the rules are clear but I don't know where you are getting the above from. HMRC advice is to re-issue VAT invoices rather than issue a VAT only invoice.

That's not to say you can't issue a VAT only invoice but it's not the recommended approach. Ultimately, you should ask your client what they would prefer.

[jamesbrown]

Sorry guys, but these are basics, and the rules clearly stated.

Initially raise invoices marked "VAT Registration applied for" for the non-VAT value.

When your registration comes through, raise all subsequent invoices (for anything) with VAT Added at the prevailing rate and raise a single invoice for each client (assuming more than one exists) for the VAT now outstanding on the invoices raised to date, quoting the relevant reference numbers.

You don't need to re-issue anything, the VAT liability is back-dated to the day you asked to be registered and FRS works perfectly happily if you're using it.

And before anyone asks, if the VAT rate changes you have to change the applicable rate at the VAT Point of the original invoice, which, for continuing supply of services, is the issue date, otherwise it's the date of delivery.

Hope that's clear...

Agree with CP, I don't know why you think this is HMRC advice. The rules are indeed clearly stated:

https://www.gov.uk/vat-registration/overview

While registration is pending, you should increase prices and then reissue invoices with the VAT decomposition later. This isn't the only way to do it but, insofar as the rules being "clearly stated", they are given above. Furthermore, it's just common sense to have the client pay upfront rather than chasing VAT later on, possibly having left the client on bad terms.

[Contreras]

Hope that's clear...

Not really.

But this is...

You can’t charge or show VAT on your invoices until you get your VAT number. However, you’ll still have to pay the VAT to HMRC for this period.

You should increase your prices to allow for this and tell your customers why. Once you’ve got your VAT number you can then reissue the invoices showing the VAT.

https://www.gov.uk/vat-registration

And the original non-dumbed down version...

HM Revenue & Customs: How long it takes to be registered and what to do in the meantime

[TheCyclingProgrammer]

And the original non-dumbed down version...

Bit off topic, but...

The HMRC section of gov.uk is fascinating in its inconsistency. In some cases it's clarified a lot of misleading stuff on the old website. In other cases it's dumbed things down for the worse. In other places it completely contradicts itself.

Take for example the issue of whether you need to register for self assessment if your only income is from dividends below the higher rate.

The old HMRC website said you need to register if you have gross income from investments, including dividends, of more than £10k. My old accountant used this to justify my wife having to register for SA a few years ago.

Now let's ignore the fact that this is just HMRCs own guidance and not representative of the legal position (which says you only have to inform HMRC if you're chargeable to tax).

The new website has a self assessment checker tool that continues to say you need to do one if you have £10k or more of investment income.

Yet if you read the page on dividends taxation (not sure if this existed on the old site):

https://www.gov.uk/tax-on-dividends/overview

You don’t have to do anything more about tax on your dividends if:

you’re a non-taxpayer
you pay the basic 20% rate of Income Tax

And on page two, in case that wasn't clear enough:

You don’t need to pay any more tax. The tax credit is automatically offset against the dividend tax you owe (10%). Just declare any dividends in your tax return, if you complete one.

And:

You don’t need to contact HMRC if you pay no tax or pay the basic rate.

Which is of course more inline with the law.

[jamesbrown]

Which is of course more inline with the law.

Ultimately, there are bound to be inconsistencies in advice across any large organisation. However, one of the problems with HMRC guidance is that they frequently adopt a position on the legislation that is contrary to a dispassionate statement of the facts. Maintaining that across a large organisation is bound to lead to inconsistencies, and their view on the requirement for submitting a SATR is one such example.

[BolshieBastard]

Mal: you say the rules are clear but I don't know where you are getting the above from. HMRC advice is to re-issue VAT invoices rather than issue a VAT only invoice.

That's not to say you can't issue a VAT only invoice but it's not the recommended approach. Ultimately, you should ask your client what they would prefer.

Its because he's spokesman for PCG IPSE!

[TykeMerc]

Its because he's spokesman for PCG IPSE! and an unbelievably arrogant pillock who will never admit when he's wrong.

FTFY