adding VAT to invoices

[Ardesco]

Hi there,

My ltd company providing accountacy services (on clients's site) for a client based in EU through an agency.

The Ltd company absed and made contract in the UK with the agency based in UK. The end client is client of the Agency and as such invoiced by the agency. My company invoice agency for the services without VAT and without giving any reference of reverse charge VAT declaration.

Further my company has no VAT No, since the turnover doesn't exceeded the limit.

How does it effect the employee providing services on client's site?

Can anyone please advice how to deal?

If you are not VAT registered you cannot charge VAT. If you do you are breaking the law.

Secondly you have a contract with an agency in the UK, you do not have a contract with the end client so any dealings between the agency and the end client are nothing to do with you.

[DonaldG]

Hi sp,

With regards to your VAT returns, did you submit NIL returns? If not then if the error is less than £2k you can just adjust your next return once you receive the VAT, do you VAT on the cash basis so you only pay vat when you receive it.

Thanks

The error limit has been increased to £10K, so you need to make a pretty big mistake before you have to do a voluntary disclosure form.

[nemoffm]

Third Party VAT rules

Hi there,

My ltd company providing accountacy services (on clients's site) for a client based in EU through an agency.

The Ltd company absed and made contract in the UK with the agency based in UK. The end client is client of the Agency and as such invoiced by the agency. My company invoice agency for the services without VAT and without giving any reference of reverse charge VAT declaration.

Further my company has no VAT No, since the turnover doesn't exceeded the limit.

How does it effect the employee providing services on client's site?

Can anyone please advice how to deal?

[TheFaQQer]

Hi sp,

If you are VAT registered then you do need to add VAT to all your invoices, you will then receive the £1750 plus VAT at £306.25.

As you are on the flat rate scheme you will then pay over the relevant percentage of the total amount received, ie £2056.25.

What you now need to do is raise a VAT only invoice to your client for the back VAT along with your VAT certificate, remember you will be liable for the VAT on a gross amount of £1750 even if you have received the VAT.

With regards to your VAT returns, did you submit NIL returns? If not then if the error is less than £2k you can just adjust your next return once you receive the VAT, do you VAT on the cash basis so you only pay vat when you receive it.

So not to worry, its common to raise a VAT only invoice as HMC&E are quite slow on VAT applications.

Thanks

As a clarification - check the contract / schedule to see what the weekly rate is. It may be £1750 including VAT, in which case you should NOT be adding £306.25 to the invoice value.

HTH.

[Danbro]

Danbro Accounting Ltd

Hi sp,

If you are VAT registered then you do need to add VAT to all your invoices, you will then receive the £1750 plus VAT at £306.25.

As you are on the flat rate scheme you will then pay over the relevant percentage of the total amount received, ie £2056.25.

What you now need to do is raise a VAT only invoice to your client for the back VAT along with your VAT certificate, remember you will be liable for the VAT on a gross amount of £1750 even if you have received the VAT.

With regards to your VAT returns, did you submit NIL returns? If not then if the error is less than £2k you can just adjust your next return once you receive the VAT, do you VAT on the cash basis so you only pay vat when you receive it.

So not to worry, its common to raise a VAT only invoice as HMC&E are quite slow on VAT applications.

Thanks

[duducontractor]

Hi,
I am slightly confused..pls help. I am a contractor with a ltd company running on flat rate VAT scheme. Till date when i invoice i have just included my gross rate 1750 per week in the invoice.Should I have been adding VAT to the amount .For eg my weekly rate is 1750. When i raise an invoice should i include 306.25 on top on this amount when i invoice my agency.

If so i cannot believe i have been so silly..(:- .I have also submitted two VAT returns till date...Is their any way I can get back this money.

thanks
sp