Vat! :-(

[DaveB]

By far the easiest thing to do is just register anyway. Avoids confusion and everyone is happy.

Get your self on the FRS and you'll save some dosh too, assuming you dont have any large vatable expenses.

None of it takes long, if you cant spare 20 mins to fill out a form you need to look at your time management and priorities.

[VectraMan]

If you charge the same price for all then that's equivalent to having a different net price depending on the customer's VAT; i.e. you're discriminating against some customers according to their country. Oops!

And in my old job the UK customers would get upset at being charged more than the US customers because of adding VAT, and telling them "it's the law" never seemed to help.

Sounds like if you're selling online you might be better off not being VAT registered.

What happens if you geuinely have no idea where the customer is because it's an online transaction?

[Davros]

I guy I used to work with just made up a VAT number and trousered the money. He got away with it for several years before he got invited to attend an interview with HMC&E (as it was then). He promptly upped sticks and went back home to Nigeria.

I suggest you do the same.

[MrsGoof]

also use Cash Accounting for VAT.

YOu only pay up once the invoice has been paid as opposed to when you issue the invoice.

[boredsenseless]

I got caught out by this... I issued a 'reconcilliation' invoice to the agent back to the time of VAT registration, the agency dragged its feet but paid up 2 quarters later.
I included the amount in the current quarter VAT submission which triggered a VAT inspection (must be a threshold thing).

The outcome was to charge me compounded interest on the missing VAT back to the companies registration... seemed very unfair to me and another example of HM Gov adopting a "robber Baron" approach to taxation...

Bear in mind that a customer has no obligation to pay a 'reconciliation' invoice if you did not point out at the time of raising the original that your VAT application was being processed and that a further invoice would be raised.

And if you don't tell them and you don't pay, HMRC consider the amount paid to include VAT and so you only get to keep 82.5% of the invoice value.

[Mustang]

What are the requirements for cash accounting?

[Mustang]

Check with HMRC but my understanding was that if someone refuses to pay the reconilliation invoice you can eventually "write off" the VAT payment and adjust the figures in a subsequent VAT return. You must notify HMRC and they will pay a visit to the company in question and demand payment from them directly.

[MrsGoof]

What are the requirements for cash accounting?

I think you just have to tell em, although there may be turnover or limits but IANAA

check the web site

[boredsenseless]

Check with HMRC but my understanding was that if someone refuses to pay the reconilliation invoice you can eventually "write off" the VAT payment and adjust the figures in a subsequent VAT return. You must notify HMRC and they will pay a visit to the company in question and demand payment from them directly.

Very true - if you warn the other company at the point of issuing the first non-VAT invoice, otherwise you are relying on their goodwill.