VAT question

[sugsy]

i have been told i must register for VAT as i earn over the limit. As a contractor , i invoice my client every month, do i need to change anything in the way i invoice them ?

i am totally confused on this.

any help appreciated on this and filling in claims etc ?

[MrsGoof]

Once you have registered and obtained a VAT number then you MUST

add VAT to your invoice as a seperate amount
include your VAT registratino number to the invoice.
every quater you must pay up any VAT your co. has received (less an VAT you have spent)

so

If you invoice for £1000 then you will invoice £1000 and VAT £175 (assuming normat VAT rate applies), so you invoice will total £1175.

Only £1000 of that invoice is your co. the rest is Gordos and his mates.

See the HMRC wesite, and speak to your accountant (you do have one?).

The WRATH of the VAT inspector is worse than being eaten by a Giant Alien Lizard, so beware!

[MrsGoof]

once your up and running check out Flat Rate and Cash Accounting

[malvolio]

Register for VAT and the information pack they supply will answer all your questions. I suggest you do that first, then come back over the bits you are not clear about (it's actually quite well written, BTW)At its simplest, once you are registered you have to add VAT to any invoice you raise. Each quarter you add up the VAT you have charged, deduct the VAT you have been charged for business expenses (hotel blls, phone lines new PCs, whatever) and send a cheque for the balance to the Excisemen. You can also back-claim VAT not charged in the financial year before you registered. You can also opt for a flat rate schmem whic is easy to manage and actuall can save you money.

It looks frightening at first glance, but it's a damn sight easier than PAYE!

[cojak]

You will need to add VAT to your current total and probably send a copy of your VAT certificate to your client to prove that you're not pocketing the extra cash.

Also invest in an accounts package that will calculate your VAT for you.

Also see the HMRCE for VAT advice on whether it's worth your while going flat rate (it's all explained there).

The VAT section of HMRCE are very nice people and go out of their way to help the newly registered. But they are efficent and dangerous when annoyed. They're much more competent than the IR.

So don't make them angry - you won't like them they're angry... (and that includes not registering when you should...)

HTH

[DaveB]

The VAT section of HMRCE are very nice people and go out of their way to help the newly registered. But they are efficent and dangerous when annoyed. They're much more competent than the IR.

So don't make them angry - you won't like them they're angry... (and that includes not registering when you should...)

HTH

I used to drink with a couple of guys in the VAT section in east London. Their investigative methods stop short of rubber coshes and electrodes, but only just. And they enjoy their work, especially when they catch someone on the fiddle.

[cojak]

Oh.. one more thing - it seems that now the IR and the C&E have merged, VAT investigations (as well as the usual PAYE ones) are now the precursor to IR35 investigations. So don't get on the radar.

You Have Been Warned...

[sugsy]

cool, what can i claim VAT back on ?

[sugsy]

well, that was simple to understand

can i claim back all petrol ? furniture ? pc equipment ? etc

[ASB]

well, that was simple to understand

can i claim back all petrol ? furniture ? pc equipment ? etc

Yes. Provided it's business use.

Petrol for example you will probably be buying personally and billing the company mileage. There is a vat element you can reclaim - but it's not the vat on all the ptrol you buy.

Look at the flat rate scheme. No reclaims, but you still bill 17.5 but only pay x% of trunover.