Flat Rate and previous years claims

[Underscore Pt2]

i've no idea what he's talking about?

[tino]

That's a damn shame!!!!

Have a pint for me from the VAT man, I'm glad that it's all worked out in your not inconsiderable favour.
Obviously some of it will go in income and corporation taxes and NI, but it's nice to get a few bob that you've not had to do much real work for.

Loving the subtle tip Tyke!

[TykeMerc]

Its only gone and worked! Invoiced agency for last two years VAT.....Monies received. FRS is registered from the date in 2007. Have agreed payment with the lovely VAT man....so i'm left with almost 8k of cash that i wasn't expecting. Its not all doom and gloom chaps!

That's a damn shame!!!!

Have a pint for me from the VAT man, I'm glad that it's all worked out in your not inconsiderable favour.
Obviously some of it will go in income and corporation taxes and NI, but it's nice to get a few bob that you've not had to do much real work for.

[Underscore Pt2]

Its only gone and worked! Invoiced agency for last two years VAT.....Monies received. FRS is registered from the date in 2007. Have agreed payment with the lovely VAT man....so i'm left with almost 8k of cash that i wasn't expecting. Its not all doom and gloom chaps!

[Underscore Pt2]

Yep - invoicing 17.5 for prior to Dec 08, then 15% for after that. Then pay HMRC 11% for first year then 12 for the rest...

[sweetandsour]

Thats right.....thats where i'm at now...just trying to sort out the FRS activation.....then hopefully i should be able to bill for the full amount and pay HMRC the FRS amount....

The FRS does not change the amount of VAT that you charge the client, but I can appreciate that the outstanding amount could be quite large so you want to be sure that you are on the FRS before you have to account for the VAT to HMRC.

That raises another complication - do you invoice VAT at 17.5% for the invoices that are dated before 1st December 2008?

I would be interested to know the answer.

[Underscore Pt2]

It is OK to send through the VAT invoices later once registered, and that is what the OP is saying that they are going to do.

One thought that did just strike me though is that to go on to the FRS a separate application must be sent to HMRC. I am not going to dig out my old paperwork now but I am sure that HMRC confirm the start date when the FRS applies and the OP should look at that.

EDIT: HMRC wrote a separate letter to confirm acceptance onto the FRS giving a specific start date (which was the same as the VAT registration start date). I didn't have to worry about back-dating VAT invoices into that period so I can't comment on that side of things.

Thats right.....thats where i'm at now...just trying to sort out the FRS activation.....then hopefully i should be able to bill for the full amount and pay HMRC the FRS amount....

I've already been through the HMRC investigation....that ended up the best way to finally get registered (i had actually sent in 3 or 4 apllication since starting the business)

I just wondered if anyone else had been in this somewhat strange situation... will update you all once i get a confirmation from HMRC.

[sweetandsour]

I thought it was illegal to bill unless you have a VAT registration number : and they only apply from a certain date?

It is OK to send through the VAT invoices later once registered, and that is what the OP is saying that they are going to do.

One thought that did just strike me though is that to go on to the FRS a separate application must be sent to HMRC. I am not going to dig out my old paperwork now but I am sure that HMRC confirm the start date when the FRS applies and the OP should look at that.

EDIT: HMRC wrote a separate letter to confirm acceptance onto the FRS giving a specific start date (which was the same as the VAT registration start date). I didn't have to worry about back-dating VAT invoices into that period so I can't comment on that side of things.

[BrilloPad]

I thought it was illegal to bill unless you have a VAT registration number : and they only apply from a certain date?

What does your accountant say?

[sweetandsour]

How would the 1% discount for the first year on the flat rate scheme be applied?

I would agree that a phonecall to the VAT helpline would be the best way to sort this scenario out.

[TykeMerc]

HMRC probably won't object if you charge VAT and pay the tax that you've collected to them. You could simply put the whole amount on the first return, there's no way they can know how your business works.

The only drawback I can think of is that one massive return followed by loads of ordinary ones might prompt them to do an inspection (which is much less stressful than it sounds) and at that you can simply tell the inspector what you've done.

Alternatively ring the HMRC helpline and ask their advice, they've probably encountered this before.

[Underscore Pt2]

bump any ideas guys?

[Underscore Pt2]

Hello all.....first time post for this ID....but i was registered some years ago! Anyway onto my qn. I've finally managed to get registered for VAT (i've been trying since April 07) and I'm now going to re-bill for the VAT from those years. No issue with that....but the qn is can I then pay back to HMRC via the flat rate for those years? My effective date on the VAT form is April 07....