Charging VAT without a VAT number

[TheFaQQer]

What did I do wrong?!

Invoiced for VAT without a VAT number.

You need to invoice without the VAT, making it clear that VAT registration is pending, and then issue a VAT only invoice when you get the number (assuming that the original invoice was issued after the VAT registration date).

[zudecke]

Thanks for the replies guys.

I perhaps wasn't clear... The invoice which was raised on my behalf by the intermediary did NOT include VAT. But it also did not compensate for the addition of VAT by way of an increased rate (as per the HMRC guidelines linked two posts up).

I have 2 options I think:

1. Ask the intermediary to simply raise another invoice for the VAT amount
2. Ask the intermediary to re-issue the same invoice to include VAT? This should be fine considering my VAT number was activated on 26th March and the invoice was raised on the 31st March.

Is option 2 permissible and advisable?

Regards,

Z

[TheCyclingProgrammer]

Both will work, it's down to the agency what they are happy to do. Ring them up and ask them!

[Contreras]

You can't do a VAT-only invoice. (edited)

What the HMRC advice actually says:

Until you receive your VAT registration number you must not charge VAT, or show VAT on your invoices. To make sure that you do not lose income in the period after you applied for VAT registration but before you receive your VAT registration number, you should increase your prices by an amount equivalent to the VAT rate relevant for your goods or services, and explain to your customers why you are doing so.

Once you receive your VAT registration number you can then reissue those invoices, amended to show your VAT registration number and the VAT charged. This will make sure that your VAT-registered customers may reclaim the VAT that they have paid

HM Revenue & Customs: Waiting for VAT registration and what to do in the meantime

If the agency won't play ball then the OP needs to cancel the self-billing agreement (citing that they are not following VAT rules) and raise his own invoices as above.

Personally I would add a separate line item for the 20%, say call it pending-VAT registration, rather than increase the rate. The agency might refuse to pay it but at least you have the right paperwork in place to chase the debt if they continue to mess about once the VAT number is issued.

[TheCyclingProgrammer]

It's not HMRCs preferred way of doing things but the above post is wrong - you certainly CAN issue a VAT only invoice.

[VectraMan]

you should increase your prices by an amount equivalent to the VAT rate relevant for your goods or services, and explain to your customers why you are doing so.

That sounds wrong to me as you're effectively sending a fraudulent invoice. But if that's what they say...

I did the VAT only invoice thing when I started, as advised by my accountant. That was a few years ago.

[TheCyclingProgrammer]

That sounds wrong to me as you're effectively sending a fraudulent invoice. But if that's what they say...

Well its only fraudulent if you don't explain why isn't it?