Reply to: VAT Registration

[DaveB]

Ive a few contractor buddies who strongly advised me against this, stating that it puts me under the watchful eye of the inspectors more so than were I not VAT registered. I rarely make purchases through my business other than travel (so far), but wouldnt want to catch the attention of the IR if there is little financial benefit to me. My friends stories of people being 'done over' after becoming VAT registered have got me a little spooked I must admit, even if (as I suspect) they have managed their financial affairs somewhat 'creatively'

If you dont try and screw the system then there is no reason not to be VAT registered. It makes you look like a proper business, clients and agents expect it anyway and the FRS will save you money in the long run.

It's easy enough to do the VAT calculations or just get your accountant to do it for you.

Not being registered will cause you more potential problems in the long run. If HMRC decide you might be over the VAT limit and not declaring/registering it, then they will come after you. If you are VAT registered then the problem doesn't arise.

Do not, under any circumstances, try to get one over on the VAT man. The IR might be willing to negotiate and take things into consideration, the VAT won't and they get very upset when people try it.

[marcus2704]

Ive a few contractor buddies who strongly advised me against this, stating that it puts me under the watchful eye of the inspectors more so than were I not VAT registered. I rarely make purchases through my business other than travel (so far), but wouldnt want to catch the attention of the IR if there is little financial benefit to me. My friends stories of people being 'done over' after becoming VAT registered have got me a little spooked I must admit, even if (as I suspect) they have managed their financial affairs somewhat 'creatively'

[Back In Business]

Im below the 60k VAT threshold at the moment, is there any reason I would benefit in applying for VAT registration? What are the ad\disadvantages of VAT registering my Ltd?

You can claim back VAT off business purchases and you make a bit on VAT paid to you if you use the flat rate scheme. IMO it looks more professional and people treat you like a supplier and not an employee.

[Back In Business]

When did you register?

December, did it myself online.

[marcus2704]

Im below the 60k VAT threshold at the moment, is there any reason I would benefit in applying for VAT registration? What are the ad\disadvantages of VAT registering my Ltd?

[Diestl]

I think accountants can chase it up and get it quicker (2 weeks).

[foritisme]

I registered about a year ago - took 2 months.

[Diestl]

Mine went through in less than 2 weeks - well to the point that I had a VAT number in hand.

When did you register?

[gables]

I've recently (last week) spoke to the VAT man and was told I'd be looking at 8-12 weeks.

Don't you just invoice ex VAT and then when you have your number start then? Unless of course the VAT registration date is back dated, but I thought the registered date will be when the number is issued.

[Diestl]

VAT reg is currently taking "up to 13 weeks" - and thats if HMRC don't ask any questions !!!

Accountant at Nixon Williams told me 2-3 weeks, I don't know where you got that from.

[Back In Business]

Mine went through in less than 2 weeks - well to the point that I had a VAT number in hand.

[The Lone Gunman]

You should be able to invoice them ex of VAT and then do a VAT invoice once you have a number.

Make sure you put a note on the original invoice.

Something like
"VAT to be charged at 17.5% = nnnnn. Invoice to follow"

[Bluebird]

VAT reg is currently taking "up to 13 weeks" - and thats if HMRC don't ask any questions !!!

[Back In Business]

You can invoice - you just have to say VAT pending, and then re-invoice the agency once your VAT number turns up. It's a bit of a pain but most agencies/companies are OK with this.

If you can be without the cash for a while then it's easier to wait it out like CB said,

[Cowboy Bob]

Everything is on track however the VAT registration wont be done in time for the contract start date (I think), and the agent is saying due some regulations or compliance it has to be in place before the contract starts.

If I recall, I believe that you can't invoice until it's in place. If you can wait to invoice until you have your VAT number then you should be sweet. You can invoice when you want - there's no time limit. Sounds to me like they're still trying to get their kick-back from the brolly...