Reply to: Embarrassed - VAT not paid by agency

[MrMarkyMark]

Erm... That was the whole point :

And the adage is, the best advice is not the most popular advice.

I pay my accountant, therefore I expect services.
I still use SJD as it goes, early adopter and get excellent service...ie detailed, personal E mail response in a couple of hours.
YMMV.

[northernladuk]

Nah. I think that covers 99.9% of your responses. 😀

Erm... That was the whole point :

[youngguy]

Hmm. That needs updating doesn't.

Nah. I think that covers 99.9% of your responses. 😀

[choci]

Absolutely this.

One of the unfortunate things is, if you slip up somewhere else, this can lead to an IR35 investigation.
Therefore knowing all of your affairs is of paramount importance.

Given the unbelievable mess that some get into and then post on here, I don't believe you are being too harsh towards the OP.

I was going to pick this apart paragraph by paragraph as nearly every one needs a comment but I really CBA. All I see are excuses and you blaming everyone else. You run your company, you are LEGALLY responsible to do it properly so ultimately it's down to you. Your accountants run a service for you, not run your business affairs, the agents, well they are just agents. Leaving anything up to them is a mistake. You been at it for a year. That's more than long enough.

Sorry this sounds harsh but this one is down to you I am afraid. You run your own business now so you've got to step up and understand all these including 24 month rules, IR35, contracts and much more.

Do you now understand FRS? Do you know what rate you are on? Do you know what discount is being applied for how long and why?

I will be certainly be checking out all info from the noobs links and most certainly on the points made as a matter of urgency.

I'm a long way from the 24 month rule, and I've tried to do as much as I can with regards IR35 by using Bauer & Cottrell for checking my contract and getting it amended, and using IPSE and Abbey Tax for some insurance peace of mind.

Thanks again all.

As soon as I have any news i'll update the thread.. I'm sure most won't be to bothered about the outcome, but for the sake of the post having a beginning, middle and end, I'll update it with how things go.

[MrMarkyMark]

I was going to pick this apart paragraph by paragraph as nearly every one needs a comment but I really CBA. All I see are excuses and you blaming everyone else. You run your company, you are LEGALLY responsible to do it properly so ultimately it's down to you. Your accountants run a service for you, not run your business affairs, the agents, well they are just agents. Leaving anything up to them is a mistake. You been at it for a year. That's more than long enough.

Sorry this sounds harsh but this one is down to you I am afraid. You run your own business now so you've got to step up and understand all these including 24 month rules, IR35, contracts and much more.

Absolutely this.

One of the unfortunate things is, if you slip up somewhere else, this can lead to an IR35 investigation.
Therefore knowing all of your affairs is of paramount importance.

Given the unbelievable mess that some get into and then post on here, I don't believe you are being too harsh towards the OP.

[northernladuk]

Yes and no,

yes in the fact I've seen how much I need to send to HMRC and thinking that because I was paying the accountancy firm a lot of money for this service that everything will be in order..

No in the fact that I didn't understand correctly how they reach the magic figure..

However in my defence, it was my very first foray in to Ltd company land, this accountancy firm advertises that they make the transition to Ltd from Umbrella easy (setting up incorporation, VAT reg etc).. I always did have it on my radar to get a more in depth knowledge of how things work as I've gone along..

Since ditching the said giant factory accountancy company, my new independant and much more personal accountant has filled in many grey area's.. this one has literally jumped up and bitten my backside out of knowwhere.

Going back to the original message, the core of the problem is that I thought that by registering for VAT I had done my bit. I was never asked for my VAT number (although I was asked for everything else due to the agency and accountancy compliance and governance procedures).

I didn't know that I had to give my VAT number, and never having had a self bill invoice before, didnt know to expect the VAT to be included on the self bill invoice..

It's been a real perfect storm of errors and bad communication / procedures.

So now I'm on the case to get everything back in order and sorted, you live and learn as they say...

Thanks again for everyones input (constructive or not)

I was going to pick this apart paragraph by paragraph as nearly every one needs a comment but I really CBA. All I see are excuses and you blaming everyone else. You run your company, you are LEGALLY responsible to do it properly so ultimately it's down to you. Your accountants run a service for you, not run your business affairs, the agents, well they are just agents. Leaving anything up to them is a mistake. You been at it for a year. That's more than long enough.

Sorry this sounds harsh but this one is down to you I am afraid. You run your own business now so you've got to step up and understand all these including 24 month rules, IR35, contracts and much more.

Do you now understand FRS? Do you know what rate you are on? Do you know what discount is being applied for how long and why?

[choci]

So you've not looked at your VAT returns?

Yes and no,

yes in the fact I've seen how much I need to send to HMRC and thinking that because I was paying the accountancy firm a lot of money for this service that everything will be in order..

No in the fact that I didn't understand correctly how they reach the magic figure..

However in my defence, it was my very first foray in to Ltd company land, this accountancy firm advertises that they make the transition to Ltd from Umbrella easy (setting up incorporation, VAT reg etc).. I always did have it on my radar to get a more in depth knowledge of how things work as I've gone along..

Since ditching the said giant factory accountancy company, my new independant and much more personal accountant has filled in many grey area's.. this one has literally jumped up and bitten my backside out of knowwhere.

Going back to the original message, the core of the problem is that I thought that by registering for VAT I had done my bit. I was never asked for my VAT number (although I was asked for everything else due to the agency and accountancy compliance and governance procedures).

I didn't know that I had to give my VAT number, and never having had a self bill invoice before, didnt know to expect the VAT to be included on the self bill invoice..

It's been a real perfect storm of errors and bad communication / procedures.

So now I'm on the case to get everything back in order and sorted, you live and learn as they say...

Thanks again for everyones input (constructive or not)

[choci]

Worth reading through the newbie guides and everything other link on the right --> ?

See if there is anything you don't know that you don't know that's gonna catch you down the line? 24 month rule, IR35, understanding contracts and so on?

As I am working away from home for 3 nights each week, I'll make sure this is my focus for filling in all the gaps over the upcoming weeks.

Thanks again.

[stek]

I wouldn't mind the agent and the end clientco will kick off a bit having to tip up extra dough even if it's the tax mans anyway in the end. Messes up the cash flow etc...

[northernladuk]

Thanks for the advice, and I assure you I am not taking any of it lightly.. I did ditch the factory accountancy firm and now I have a well recommended accountant going through everything. So in between trying to get the money back over to me, my current accountant will go through everything to see how the land lies.

Cheers.

Worth reading through the newbie guides and everything other link on the right --> ?

See if there is anything you don't know that you don't know that's gonna catch you down the line? 24 month rule, IR35, understanding contracts and so on?

[choci]

Sack them and get a Freeagent accountant. You can see exactly where you are with VAT, it tells you when it's due, it allows you to submit it directly from FA and so on...

I've got a feeling this is the tip of the iceberg.....

And I've been busting to so will finally say it. Don't make light of this. What you have is not naïve. Messing up with 10's of K of money in an extremely fundamental area of B2B for over a year is way beyond that.

Thanks for the advice, and I assure you I am not taking any of it lightly.. I did ditch the factory accountancy firm and now I have a well recommended accountant going through everything. So in between trying to get the money back over to me, my current accountant will go through everything to see how the land lies.

Cheers.

[TheCyclingProgrammer]

Hello, and thank you for your valuable advice..

So basically I was paying the accountancy firm (think of one of those large factory type of accountants) so they would then advise me each quarter on how much to pay HMRC.. I am on the flat rate btw.

Thank you for your input, much appreciated.

So you've not looked at your VAT returns?

[northernladuk]

Hello, and thank you for your valuable advice..

So basically I was paying the accountancy firm (think of one of those large factory type of accountants) so they would then advise me each quarter on how much to pay HMRC.. I am on the flat rate btw.

Thank you for your input, much appreciated.

Sack them and get a Freeagent accountant. You can see exactly where you are with VAT, it tells you when it's due, it allows you to submit it directly from FA and so on...

I've got a feeling this is the tip of the iceberg.....

And I've been busting to so will finally say it. Don't make light of this. What you have is not naïve. Messing up with 10's of K of money in an extremely fundamental area of B2B for over a year is way beyond that.

[choci]

This thread has gone a bit meta...

OP, if I'm understanding your post correctly, you were on a self-billing arrangement with the agency, but because you hadn't provided them with evidence of your VAT registration status, the invoices they raised did not have any VAT on them (effectively, you have not charged them VAT).

This means either the invoices need to be re-issued with the correct VAT added (and the previous invoices credited via a credit note). Alternatively you may be able to send them an invoice for just the missing VAT although I'm not sure if this is the preferred way of doing things (the agency may want properly re-issued VAT invoices to support their own ability to reclaim that input VAT).

That just leaves the question of what you've been entering in your VAT returns up until this point, and are you on the flat-rate scheme?

If, for arguments sake, you've been paid £50000 over the last year, have you treated that as a gross amount in your VAT returns? If so, then you would have also under-reported the VAT owed and you may need to re-submit your VAT returns for each quarter.

You need to speak to the agency and ask them how they'd like to handle the wrongly issued invoices and speak to your accountant about sorting out the VAT return mess.

Hello, and thank you for your valuable advice..

So basically I was paying the accountancy firm (think of one of those large factory type of accountants) so they would then advise me each quarter on how much to pay HMRC.. I am on the flat rate btw.

Thank you for your input, much appreciated.

[choci]

All edits in place. I think.

Very much appreciated sir!

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