Reply to: VAT Registration delay

[Jessica@WhiteFieldTax]

Thanks all, much obliged for the responses.

Yes - I understand the detail on invoicing without VAT and then creating new VAT-only invoices to cover the post VAT-registration period once I actually get my registration details. I'm just worried that this is dragging on so long it'll really confuse my client when I try to do that. Even though I explained all of that to them 3 months ago...

I am a bit annoyed with my accountant, and I definitely begrudge paying for a middle-man that doesn't seem that interested in getting involved. I'll chase them up again and hopefully something will happen. But this thread has reassured me (a bit!) that the problem is probably on HMRC's side.

Can I invoice for VAT for work carried out before the date on which the HMRC gets round to registering me? If that makes sense. It'd be nice to make use of the FRS while it exists, and for the period I've been trading.

The last answer is nope.

You can get done for fraud as the money you are collecting is HMRC's not yours.

That's not correct advice, Sue Ellen.

The effective date of registration is definitive. Generally, even if there is a delay with registration, that doesn't change, so will be what ever date OPs accountant put on application, even if it is some months ago.

OP will **have ** to charge vat from that date even if it is retrospective.

@OP - this isn't uncommon - get on to your accountant and confirm the effective date of registration requested, and also when the actual submission was made. Get them to both chase it and advise you, its what you pay them for. If you aren't impressed with their pro activity, then it may be that's because there isn't a lot happening yet, or because you haven't asked the right questions - push, see what answers you get, and that will give you a better idea of the job they are doing for you?

[SlipTheJab]

But only if you're direct. If you're through an agency the sector is irrelevant.

I would imagine many contractors in those sectors are on decent enough rates to exceed the VAT threshold anyway.

Yeah that's true.

[TheCyclingProgrammer]

Banks and gambling, makes up quite a large chunk, 80% of my clients in the last 5 years fall into this sector...

But only if you're direct. If you're through an agency the sector is irrelevant.

I would imagine many contractors in those sectors are on decent enough rates to exceed the VAT threshold anyway.

[SlipTheJab]

It only makes you 20% cheaper to clients who aren't VAT registered. I imagine most of our clients are, especially if agencies are involved so no real gain from not registering and you lose out on reclaiming VAT on your costs.

Banks and gambling, makes up quite a large chunk, 80% of my clients in the last 5 years fall into this sector...

[SueEllen]

You can actually submit it yourself. HMRC should tell you if you are trying to repeat a registration.

[Lance]

Lots of ideas but not many suggesting your accountant simply hadn't submitted the registration. That's where my money is.
I got swapped from annual to quarterly early December. Supposed to be a 2 week lead time and took 2 days so I don't buy the backlog of work.

[SueEllen]

Thanks all, much obliged for the responses.

Yes - I understand the detail on invoicing without VAT and then creating new VAT-only invoices to cover the post VAT-registration period once I actually get my registration details. I'm just worried that this is dragging on so long it'll really confuse my client when I try to do that. Even though I explained all of that to them 3 months ago...

I am a bit annoyed with my accountant, and I definitely begrudge paying for a middle-man that doesn't seem that interested in getting involved. I'll chase them up again and hopefully something will happen. But this thread has reassured me (a bit!) that the problem is probably on HMRC's side.

Can I invoice for VAT for work carried out before the date on which the HMRC gets round to registering me? If that makes sense. It'd be nice to make use of the FRS while it exists, and for the period I've been trading.

The last answer is nope.

You can get done for fraud as the money you are collecting is HMRC's not yours.

[booms]

Thanks all, much obliged for the responses.

Yes - I understand the detail on invoicing without VAT and then creating new VAT-only invoices to cover the post VAT-registration period once I actually get my registration details. I'm just worried that this is dragging on so long it'll really confuse my client when I try to do that. Even though I explained all of that to them 3 months ago...

I am a bit annoyed with my accountant, and I definitely begrudge paying for a middle-man that doesn't seem that interested in getting involved. I'll chase them up again and hopefully something will happen. But this thread has reassured me (a bit!) that the problem is probably on HMRC's side.

Can I invoice for VAT for work carried out before the date on which the HMRC gets round to registering me? If that makes sense. It'd be nice to make use of the FRS while it exists, and for the period I've been trading.

[TheCyclingProgrammer]

Be aware that when a VAT application is done, an effective date of VAT registration will be chosen. You should be charging 20% on top of your prices from that date onwards, regardless of whether your application has been fully processed or

Just to be clear to OP, this means adding 20% to your invoice but not describing it as VAT. You cannot charge VAT until your registration is complete. You will need to issue credit notes and new invoices once your registration is through.

This is the HMRC recommendation but I can see some clients not being happy about it, particularly agents. Until you have your registration and supply a VAT invoice they cannot reclaim the 20% you've added to your invoice.

The alternative as somebody said is to issue new invoices later or a VAT only invoice and chase the clients for payment.

[TheCyclingProgrammer]

TBH What with the changes coming in soonish I wouldn't bother getting VAT registered unless I absolutely had to, makes you 20% cheaper and less hassle all round.

It only makes you 20% cheaper to clients who aren't VAT registered. I imagine most of our clients are, especially if agencies are involved so no real gain from not registering and you lose out on reclaiming VAT on your costs.

[Maslins]

I'm a bit baffled by this thread.

I agree that VAT registration timings can vary significantly from client to client, but in my experience it's from ~2 working days up to 2-3 weeks tops. I don't think we've ever had a client where it's been over a month before the VAT application has been accepted, unless perhaps HMRC made it clear they needed additional information on a couple of things. We probably do something like 5 VAT applications a month, so not millions, but enough that I'd be surprised if our experience was unrepresentative and just freakishly lucky...and I certainly don't think we have any kind of green light to applications we submit.

From the OP, I'm wondering whether maybe your accountant never actually did the VAT application. Eg perhaps they half filled in the forms but never clicked "submit" at the end.

Be aware that when a VAT application is done, an effective date of VAT registration will be chosen. You should be charging 20% on top of your prices from that date onwards, regardless of whether your application has been fully processed or not.

I agree with Alan that firing your accountant at this stage does seem a bit excessive, but I would recommend you hassle them to follow up the application.

[SlipTheJab]

Why is VAT so important to you?

Carry on invoicing - less the VAT.

TBH What with the changes coming in soonish I wouldn't bother getting VAT registered unless I absolutely had to, makes you 20% cheaper and less hassle all round.

[Jessica@WhiteFieldTax]

Sometimes VAT reg can take a fortnight, sometimes it can take upwards of three months. We do lots of registrations and there doesn't seem to be any pattern or cause for the quick ones or the delays. It's just one of the frustrations dealing with HMRC day-to-day. Seems a bit extreme to fire your accountant about something they have. I control over.

Concur. Its frustrating. It should be an automatic process, but they are so fraud paranoid that it slows to a snails pace. Politics on the rights & wrongs aside, its why I worry about HMRC trying to cope with tax aspects of Brexit and bring in MTD, for that matter new IR35 regime, at the same time. They are simply not able to cope. /hobbyhorseoff

On a practical level, Alan, don't know if you've found the same, but tweaking the trade description can help. Because of Missing Trader Fraud anything that mentions IT, more so IT hardware, can cause angst. "Business consulting" or a white space note that there is no dealing in hardware etc, can help.

[SueEllen]

Sometimes VAT reg can take a fortnight, sometimes it can take upwards of three months. We do lots of registrations and there doesn't seem to be any pattern or cause for the quick ones or the delays. It's just one of the frustrations dealing with HMRC day-to-day. Seems a bit extreme to fire your accountant about something they have. I control over.

So it depends on when the people at HMRC who actually do some damn work go on holiday how long registrations take.

[Alan @ BroomeAffinity]

Sometimes VAT reg can take a fortnight, sometimes it can take upwards of three months. We do lots of registrations and there doesn't seem to be any pattern or cause for the quick ones or the delays. It's just one of the frustrations dealing with HMRC day-to-day. Seems a bit extreme to fire your accountant about something they have. I control over.