I am FD for a local charity, and last quarter we had a £17k Vat refund due (usually pay £2-3k), I was expecting an Inspection.
In the end we just got a "can you explain, please show workings, copies of 6 biggest invoices". refund was posted a week or so later.
As others have said, if it's just normal business fluctuation I wouldn't stress about it.
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Reply to: Unusual billing and VAT
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Previously on "Unusual billing and VAT"
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Originally posted by PurpleGorilla View PostI personally consider highly variable income as a good indicator of non-standard (9-5 x 5) working practices. I.e. I am not a permie.
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I personally consider highly variable income as a good indicator of non-standard (9-5 x 5) working practices. I.e. I am not a permie.
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Originally posted by LondonManc View PostWho said he's coming off the scheme? May as well stay on it for the next two reporting periods at least.
or am I missing something?
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Originally posted by pr1 View PostThink there's a rule against doing that generally though, which might "raise a flag" if you suddenly invoiced for 6 months worth of work (on invoice accounting) the month before you come off the FRS scheme
Can't remember the name of it
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Originally posted by LondonManc View PostHappy days indeed.
As others have said, as long as you've got it documented and the bank statements to prove that you've been paid, then all is good (suits you to be paid before April to for the VAT collection boost.)
Can't remember the name of it
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Originally posted by jmo21 View Posthaha, of course not!!
just wondered if it might cause any issues.
It is a v good position to be in.
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Originally posted by jamesbrown View PostI'm curious to know what you would've done had we said "yes". You're not about to decline the work, I assume. There's nothing you can do about HMRC's risk assessment process, but this would be a pretty weak indicator, as most businesses have fluctuating income. Indeed, you can't get much more consistent w/r to income than employment.
just wondered if it might cause any issues.
It is a v good position to be in.
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Originally posted by pr1 View PostIf that's the case (that they'll definitely pay it within a few weeks i.e. within the same quarter) - it probably won't matter
On invoice accounting you'd have to pay the 6 months of VAT up front, which might affect your cash flow (it at least would mean you'd take money out of your business savings account) - could cause you problems if they then changed their mind and you had to rescind the invoices
On cash accounting you wait until the invoices are paid to pay the VAT, there's no reason (that I have ever been convinced by) for any contractor turning over less than £1.35m/year not to be on it - which probably covers all of us... except maybe MrMarkyMark
Yep, I am on cash accounting, but I didn't understand the relevance. I didn't mention it in the original post, but yes, they want billed and to pay before the end of financial year.
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I'm curious to know what you would've done had we said "yes". You're not about to decline the work, I assume. There's nothing you can do about HMRC's risk assessment process, but this would be a pretty weak indicator, as most businesses have fluctuating income. Indeed, you can't get much more consistent w/r to income than employment.
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Originally posted by pr1 View PostIf that's the case (that they'll definitely pay it within a few weeks i.e. within the same quarter) - it probably won't matter
On invoice accounting you'd have to pay the 6 months of VAT up front, which might affect your cash flow (it at least would mean you'd take money out of your business savings account) - could cause you problems if they then changed their mind and you had to rescind the invoices
On cash accounting you wait until the invoices are paid to pay the VAT, there's no reason (that I have ever been convinced by) for any contractor turning over less than £1.35m/year not to be on it - which probably covers all of us... except maybe MrMarkyMark
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Originally posted by jmo21 View PostI'm not clear why you are asking this, can you expand please?
the invoices are going to be issued and paid all the within the next few weeks. They are paying in advance, and the actual services will happen over the next 6 months.
On invoice accounting you'd have to pay the 6 months of VAT up front, which might affect your cash flow (it at least would mean you'd take money out of your business savings account) - could cause you problems if they then changed their mind and you had to rescind the invoices
On cash accounting you wait until the invoices are paid to pay the VAT, there's no reason (that I have ever been convinced by) for any contractor turning over less than £1.35m/year not to be on it - which probably covers all of us... except maybe MrMarkyMark
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Originally posted by jmo21 View PostI'm not clear why you are asking this, can you expand please?
the invoices are going to be issued and paid all the within the next few weeks. They are paying in advance, and the actual services will happen over the next 6 months.
As others have said, as long as you've got it documented and the bank statements to prove that you've been paid, then all is good (suits you to be paid before April to for the VAT collection boost.)
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Originally posted by pr1 View PostWhy aren't you on cash accounting?
the invoices are going to be issued and paid all the within the next few weeks. They are paying in advance, and the actual services will happen over the next 6 months.
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