No Business Bank Account yet BUT new contract next week. What to do?

[PinkPoshRat]

My Ltd is only a week old, and I have a new contract starting next week. The agency want to know what my bank account details are, but I haven't had one opened yet (I have applied, but it seems to take ages to have one opened.)

I also need to give the agency my VAT number, and as with the bank account, the VAT number hasn't come through yet.

What do you think I should tell the agency?
Can I start on a contract without proof of my VAT etc?

Thanks Peeps

[Stag Cozier]

Tell them it's in the process of being setup and you will supply it to them later. You've got your company setup which is the main thing so that the contract can be drawn up.

[lje]

Start the contract and send the details through when you have them. You won't be able to invoice until you have a bank account (where would they pay the money?).

If you've applied to be VAT registered then you have to charge the extra 17.5% on your invoices but you're not allowed to call it VAT. Then, once you have your VAT number you reissue the invoives with the VAT identified on it. Details here - HM Revenue & Customs: Waiting for VAT registration and what to do in the meantime.

[SackmanandCo]

we've noticed that vat registrations are slow. best to apply on line rather than paper in order to slow up but do not do until bank account is set up.

[PinkPoshRat]

The agency are being very understanding with me. As with your advice, they are happy for me to start on the contract and then invoice them once everything is in place.

Thanks for helping me!

[rpgpgmr1]

I had similar problem earlier this year. Took about 8 weeks for VAT reg to come through so in meantime I invoiced but with a line saying "VAT number applied for and outstanding VAT will be invoiced once details received". Then when the VAT number came through raised an invoice for VAT only for each invoice that had been issued.
Bank Account - fortunately only took 2 weeks to get set up. I wouldnt want to leave it for 8 weeks before I invoiced the Agency. I was prepared to give over a personal bank account but then leave the money untouched and ready to transfer to business account. Rather receive payments into a personal account than not invoice at all , unless you whole heartedly trust the agency .....
I have a feeling you need the Bank account details for the VAT registration form?

[escapeUK]

I had the same problem start of this year. I made the very unfortunate decission of trying to open a "free" bank account with Abbey. I never actually got one, despite having excellent credit. After 3 weeks I gave up.

I then rung up Natwest and had an account number the next day.

In the unlucky coincidence that you are waiting for Abbey then forget it and move on.

I have a feeling you need the Bank account details for the VAT registration form?

No you dont, no.

[Wanderer]

I also need to give the agency my VAT number, and as with the bank account, the VAT number hasn't come through yet.

Just invoice them anyway. When they say "How do we pay you", you tell them your bank account is getting setup. Once you have the account number they can pay you straight away. If you wait till you get your account number before invoicing them it may be another month's wait till they pay you (depending on their payment terms).

As others say, VAT registration takes a while to come through but you can retrospectively charge VAT once you have your number. The agency won't care because they just claim the VAT back from HMRC so it's no loss to them.

Don't forget to apply for the VAT Flat Rate Scheme (FRS). This means you can charge VAT at 17.5% and only pay 12% of it to HMRC (depending on your business) so there's money for nothing to be had there and it simplifies your accounting.

[Clare@InTouch]

Don't forget to apply for the VAT Flat Rate Scheme (FRS). This means you can charge VAT at 17.5% and only pay 12% of it to HMRC (depending on your business) so there's money for nothing to be had there and it simplifies your accounting.

Go careful though, the flat rate scheme is not suitable for everyone. You need to take into account the value of any VAT you may reclaim on purchases which could outweigh any profit from the scheme. Also consider the value of your sales, as you may exceed the turnover limit.

You'll also have to pay the flat rate VAT percentage on bank interest and EU sales - this can be a huge issue because you don't charge 17.5% but still have to pay 12%.

[lje]

I had similar problem earlier this year. Took about 8 weeks for VAT reg to come through so in meantime I invoiced but with a line saying "VAT number applied for and outstanding VAT will be invoiced once details received". Then when the VAT number came through raised an invoice for VAT only for each invoice that had been issued.

Note that the HMRC say you shouldn't mention the word VAT on your invoice until you are registered. You should add the 17.5% (may be higher later today!) to your invoices when they are raised. Discuss this with your client/agent so that they understand what this extra charge is for. Also, you are not supposed to raise an invoice for VAT only once you get the number, you should instead reissue every invoice with the VAT properly identified.

Bank Account - fortunately only took 2 weeks to get set up. I wouldnt want to leave it for 8 weeks before I invoiced the Agency. I was prepared to give over a personal bank account but then leave the money untouched and ready to transfer to business account. Rather receive payments into a personal account than not invoice at all , unless you whole heartedly trust the agency .....
I have a feeling you need the Bank account details for the VAT registration form?

You should never ask a client/agency to pay into your private bank account. Even if you don't touch the money and transfer it into your company account it will be looked on very negatively by the HMRC should they ever do an audit.