VAT - Do I need to back pay

[Hotlatte]

Hi,

I am an IT contractor. After meeting with the accountant today he advised that my income went above the threshold of VAT registration which is 73k in December.

He advised that now I need to register and pay VAT on the funds earnt since December 2011 to date. I want to be sure that I am doing the right thing could someone please advise that I would i need to pay VAT that i didn't charge the agency for?

Am i liable to pay VAT on the payments I didn't charge the VAT in first place?

so for example 73k + 5k earnt since December 2011. He said I would need pay VAT on 5k.

I will appreciate it very much.

regards.

[cojak]

Should I register VAT?

[Hotlatte]

Many thanks for the response but not sure if it answers the question. Bit confused now

[SueEllen]

Many thanks for the response but not sure if it answers the question. Bit confused now

Have you read the link?

The accountant and the link make it clear that once your turnover is over 73K you have to register and pay VAT.

As you are paying an accountant who probably deals with quite a few small businesses I'm sure they can give you appropriate advice if you ask them.

[Hotlatte]

Have you read the link?

The accountant and the link make it clear that once your turnover is over 73K you have to register and pay VAT.

As you are paying an accountant who probably deals with quite a few small businesses I'm sure they can give you appropriate advice if you ask them.

Thanks a lot - one question I have is that will I be able to back charge the agency to pay the VAT from December?

[SueEllen]

Send them a VAT invoice.

You may have to chase them up to pay it.

To be honest your accountant should have told you to register from VAT from the beginning as it makes life easier for you if you mainly deal with agencies.

They don't lose out with paying for your services with VAT added.


BTW do you know this forum has a search facility?

Lots of the things you have asked have already been answered many times.

If you post a question like this in the week without showing you have already used the search facility or some other research you are likely to get flamed. We are not here to spoon feed people knowledge that is already out there.

[blinko]

Your VAT will be backdated to the point at which your crossed the VAT threshold. (Your effective date will be on your Cert)

You will be issued a VAT certificate.

You will then need to Invoice any companies for VAT ONLY as per the date on the VAT cert.

Then pay money to HMRC

[Clare@InTouch]

Make sure you look into the Flat Rate Scheme too, it could well be in your favour as long as you're invoicing in the UK and don't have a lot of purchases. Talk to your accountant to get it backdated to the VAT registration date.

[Jeremiah@RHJAccountants]

The best advice your accountant should of given you is to register for VAT from the start of your company and on the Flat Rate Scheme too at 14.5% for IT contractors.

You will get the 1% discount for for being in the first year for vat registration so 13.5%.

I would really speak to your accountant as they should be giving you this sort of advice as it is fundamental for a new company.