Question about VAT

[d000hg]

Thanks. I certainly will ask my accountant.

[Ardesco]

http://customs.hmrc.gov.uk/channelsP...ument#P22_2088

Have a look through the above. Software development should count as a service, and services to the US do not have to have VAT added on them. You'll have to note it in your turnover though.

I believe you can also request to be exempt from VAT registration if all your income is vat exempt.

Bear in mind IANAA so talk to your accountant, and/or the VAT help line to verify everything, you don't want to screw about with the VAT man, he is not a nice person to annoy.

[d000hg]

So if I do software development for a company in the US, what's the story in this case? Are there any special rules?

I don't see any CUK article on VAT, is there one?

[ASB]

The current threshold when you have to register for VAT is £64,000 if I understood correctly. My clients are mostly in the US which means there is no concept of charging them VAT (I think) which means I don't want to pay VAT until have to, since I have very few expenses.

My question is, if I were to pass the threshold by having a turnover of £65,000 do I pay VAT on everything or on everything over the threshold?

It make no difference to what you pay vat on. The difference is whether you need to charge vat.

[d000hg]

But if I sell my services (software development) isn't this always subject to VAT? If my client isn't VAT-registered I just have to eat the VAT myself don't I, instead of passing it on to the client? I thought the £64,000 was for turnover of all kinds, not profit.

[Ardesco]

The current threshold when you have to register for VAT is £64,000 if I understood correctly. My clients are mostly in the US which means there is no concept of charging them VAT (I think) which means I don't want to pay VAT until have to, since I have very few expenses.

My question is, if I were to pass the threshold by having a turnover of £65,000 do I pay VAT on everything or on everything over the threshold?

You only pay HMRC the VAT that you collect. If all of your income is VAT exempt you don't pay any VAT to HMRC.

[d000hg]

The current threshold when you have to register for VAT is £64,000 if I understood correctly. My clients are mostly in the US which means there is no concept of charging them VAT (I think) which means I don't want to pay VAT until have to, since I have very few expenses.

My question is, if I were to pass the threshold by having a turnover of £65,000 do I pay VAT on everything or on everything over the threshold?