20% SALES TAX received but NOT requested

[zimmerman90]

Hi,

I received my first weeks invoice from my agency for an IT contract; I invoiced x amount and received 20% sales tax on the gross amount.
I'm not VAT registered and did not request any payment. What's the legality around this payment?! IF for example they continue to do the same.

Thanks,

[Darren at Fox-Bartfield]

VAT

If you're not registered for VAT, give the agency a call and let them know. Then ask if they want it returned or will they deduct from the next invoice.

Have you spoken to your accountant about being VAT registered?

[northernladuk]

If you're not registered for VAT, give the agency a call and let them know. Then ask if they want it returned or will they deduct from the next invoice.

Have you spoken to your accountant about being VAT registered?

Noooo. What he wants to know is can he keep it and can he keep quiet and keep getting paid it.

[TheCyclingProgrammer]

If you're not registered for VAT, give the agency a call and let them know. Then ask if they want it returned or will they deduct from the next invoice.

Have you spoken to your accountant about being VAT registered?

Assuming OP is on self-billing, even if they tell him to keep the extra money and deduct it from their next payment, wouldn't they still need to re-issue a correct invoice? My understanding is that if you charge VAT when you're not registered and don't rectify this promptly you can still end up with a debt to the crown for the VAT that was invoiced, not to mention penalties.

[Darren at Fox-Bartfield]

Invoicing

Yes they will and if self billing, they should take care of it themselves but OP won't know until he chats with them.

Otherwise they'll keep sending an extra 20% on each remittance.

[craigy1874]

If you're not registered for VAT, give the agency a call and let them know. Then ask if they want it returned or will they deduct from the next invoice.

Have you spoken to your accountant about being VAT registered?

Hardly likely to be much point once new flat rate rules come in.

[zimmerman90]

reply..

thanks for the replies; i didn't request VAT to be added and have no desire to register for VAT. the invoice was generated by them after advising online my days worked eg day rate x 5, for week 1. my concern is if they make the same mistake again, is my company liable for the 'overpayment'? obviously i can speak to them; but wanted to know what the law states.

[northernladuk]

thanks for the replies; i didn't request VAT to be added and have no desire to register for VAT. the invoice was generated by them after advising online my days worked eg day rate x 5, for week 1. my concern is if they make the same mistake again, is my company liable for the 'overpayment'?

Dunno the legals but you've been given money that isn't yours. Call the agency, tell them and give it back. Don't bugger about with VAT money if you are registered or not.

And why don't you want to register for VAT? Get yourself of FRS and you make money on the perc...oh... hang on...

[ASB]

thanks for the replies; i didn't request VAT to be added and have no desire to register for VAT. the invoice was generated by them after advising online my days worked eg day rate x 5, for week 1. my concern is if they make the same mistake again, is my company liable for the 'overpayment'? obviously i can speak to them; but wanted to know what the law states.

The company is liable for any overpayment. Though if you can wait 6 years you might be ok.

It is not necessarily a question of whether or not you have a desire to register for vat. There is a point at which you have to based on turnover. Whether you will reach that or not I don't know of course.

[SlipTheJab]

Really not worth messing with the VAT man, i missed my payment deadline by one day last quarter (slipped my mind), only a day late and the first time this has happened in 5 years of contracting....

... a few days letter a stern letter from the VAT mob lands on my doorstep telling me I've been a naughty boy and if It happens again within the next 12 months I'll be hit with a 2% penalty (which will go up on each transgression), I made sure to pay this quarter as soon as my accountant calculated the amount due!