Reply to: Account engagement letter- Filing vs Prepare VAT

[7of9]

Must have changed recently then because I had to get an activation code when I moved from paper to online returns.

My accountant registered me with HMRC recently. 'Submit a VAT return' service doesnt require ACTIVATION CODE. But 'Change registration details' still requires the code. =)

[7of9]

Sorry, my reply obviously wasn't clear - the filing of the return and the subsequent payment are separate processes, and it's perfectly fine for one person to file the return and a different person to them make payment. We file a lot of returns for clients, and they then do a bank transfer or set up a DD themselves.

The same goes for PAYE - we file year end returns, and we can file NIL returns too, but again it's the client that makes the actual physical payments.

It wouldn't be common for an accountant to make the payments, as to do so they would need access to your bank account. Since the managed service company legislation was introduced a few years back most accountants wouldn't want to have access to your business bank accounts (apart from the ability to view transactions).

Hi Clare, thanks for clarifying things. My accountant has offered to file my VAT and PAYE returns. =) I only need to make the payments. This was what he promised at the beginning anyway.

[SallyPlanIT]

Must have changed recently then because I had to get an activation code when I moved from paper to online returns.

It did, quite recently, which is good news as many people leave it until the last moment!

[craig1]

You can register on the Government Gateway as an "organisation" and file a VAT return on the same day. This is one of the few services that doesn't require an activation code.

Must have changed recently then because I had to get an activation code when I moved from paper to online returns.

[SallyPlanIT]

One thing to note if you intend to do online transactions with HMRC such as VAT filing: if you don't have a Government Gateway username/password, get one sorted now! It'll take 1-3 weeks to get it done depending on the turnaround speed this month and they'll be very unsympathetic if you go to file at the end of a quarter and can't do so.

Edit: A business one, not a personal one!

You can register on the Government Gateway as an "organisation" and file a VAT return on the same day. This is one of the few services that doesn't require an activation code.

[Clare@InTouch]

Thanks for the reply Clare. Actually one of my friends' accountant does his PAYE/NIC for him. You need make payment for VAT as well. If you use this argument, then in theory everyone has to do their VAT return themselves as well.

Sorry, my reply obviously wasn't clear - the filing of the return and the subsequent payment are separate processes, and it's perfectly fine for one person to file the return and a different person to them make payment. We file a lot of returns for clients, and they then do a bank transfer or set up a DD themselves.

The same goes for PAYE - we file year end returns, and we can file NIL returns too, but again it's the client that makes the actual physical payments.

It wouldn't be common for an accountant to make the payments, as to do so they would need access to your bank account. Since the managed service company legislation was introduced a few years back most accountants wouldn't want to have access to your business bank accounts (apart from the ability to view transactions).

[SueEllen]

Thank you for the help Craig. I am under the flat rate scheme.

And Yes, I have been issuing invoices to my agency. So I don’t need to file a NIL return yet.

Good news is my accountant has decided to file VAT/PAYE for me after I complainted. I still need to make the payment to HMRC online but they will calculate the amount for each quarter when they do my quarterly report. =)

If you did the calculation yourself you could set up a direct debit to come out 7 working days after the quarter end for the money.

[7of9]

NP.

One other thing that occurred to me this morning was your statement: "I don’t understand whether I need to file one or not. I am not taking salary until next April."

If you've hired an accountant, got a VAT number and so on, I assume you've started trading, maybe issuing invoices or spending money. If you're issuing invoices or spending money, you'll most likely have VAT liabilities or can reclaim VAT. It's irrelevant when you take money out of the company, it's when it comes in that's important. If you've started business and have bought some assets, e.g. new laptop, etc, then that's VAT money you can reclaim.

You also need to check what VAT regime you are working under. Flat rate, cash accounting or "normal" VAT. Again, either your accountant or the VAT people should be able to tell you. That's a very important issue that could get you in a bit of trouble if you get it wrong.

Most of the issues here are why I do all my own books and returns but get them professionally checked at year end to make sure I'm doing nothing stupid.

Thank you for the help Craig. I am under the flat rate scheme.

And Yes, I have been issuing invoices to my agency. So I don’t need to file a NIL return yet.

Good news is my accountant has decided to file VAT/PAYE for me after I complainted. I still need to make the payment to HMRC online but they will calculate the amount for each quarter when they do my quarterly report. =)

[craig1]

Thanks a lot craig.

NP.

One other thing that occurred to me this morning was your statement: "I don’t understand whether I need to file one or not. I am not taking salary until next April."

If you've hired an accountant, got a VAT number and so on, I assume you've started trading, maybe issuing invoices or spending money. If you're issuing invoices or spending money, you'll most likely have VAT liabilities or can reclaim VAT. It's irrelevant when you take money out of the company, it's when it comes in that's important. If you've started business and have bought some assets, e.g. new laptop, etc, then that's VAT money you can reclaim.

You also need to check what VAT regime you are working under. Flat rate, cash accounting or "normal" VAT. Again, either your accountant or the VAT people should be able to tell you. That's a very important issue that could get you in a bit of trouble if you get it wrong.

Most of the issues here are why I do all my own books and returns but get them professionally checked at year end to make sure I'm doing nothing stupid.

[7of9]

If you've got a VAT registration, you need to file returns even if you've spent/invoiced nothing in the quarter. Takes less than 1 minute to do a nil return: log in, type 0 into all the boxes and hit send. You can delegate it to an accountant but it's your company's legal responsibility.

Again, make sure you get a HMRC online account and link it to VAT. https://online.hmrc.gov.uk/ Make sure you give yourself plenty of time!

Also, if you're unsure of your filing date and the accountant is proving unreliable, you can call the VAT people, they're very helpful, probably the most helpful of all the government helldesks. 0845 010 9000.

Thanks a lot craig.

[craig1]

Thank you all for your reply.

I am really shocked to find out I have to do so much filing after the accountant promised me that I only need to do my personal tax return and everything else will be taken care of by his company.

At the moment I was told not only I need to do my VAT filing , but also I need to do make NIL declaration online by myself. I don’t understand whether I need to file one or not. I am not taking salary until next April.

This is what my accountant said to me
"If you do not have any PAYE or NIC payments due in a quarter, then you must file a NIL return, and you can do this by submitting a NIL declaration online.

Please note that the PAYE/NIC is due by the 19th of the month of the quarter end. "

A stupid question: Is 19th of the quarter end 19th of this month? I hope not, as they only told me today

If you've got a VAT registration, you need to file returns even if you've spent/invoiced nothing in the quarter. Takes less than 1 minute to do a nil return: log in, type 0 into all the boxes and hit send. You can delegate it to an accountant but it's your company's legal responsibility.

Again, make sure you get a HMRC online account and link it to VAT. https://online.hmrc.gov.uk/ Make sure you give yourself plenty of time!

Also, if you're unsure of your filing date and the accountant is proving unreliable, you can call the VAT people, they're very helpful, probably the most helpful of all the government helldesks. 0845 010 9000.

[SueEllen]

I actually got in touch with many accountancy firms including all the ones recommended in the forum. My current accountant made the best impression. That is why I went with them.

However I called SJD and Nixon W today. The sales people on the phone said yes when I asked whether they would file VAT return for me. But to be honest, I am not sure they understand what I was asking for. All they said was yes, yes, yes, just switch to us, we would do everything for you.

All businesses want new business so they will do their best to make a good impression.

Anyway calculating and filing VAT and filing PAYE is trivial and not hard to do yourself at all. It's also a good way of forcing you to keep an eye on the books and what your accountant is up to. (I know some people not contractors who have had crooked accountants.)

However your accountant should do your self-assessment return as they are really simple to do for an accountant for the vast majority of people.

[7of9]

In that case you will have to pay for your personal tax return out of your own pocket, not your LtdCo's bank account.

Ditch that accountant and get one that does the filing for you and your personal tax return is included.

I actually got in touch with many accountancy firms including all the ones recommended in the forum. My current accountant made the best impression. That is why I went with them.

However I called SJD and Nixon W today. The sales people on the phone said yes when I asked whether they would file VAT return for me. But to be honest, I am not sure they understand what I was asking for. All they said was yes, yes, yes, just switch to us, we would do everything for you.

[7of9]

Some accountants will prepare the return for you and ask you to file it yourself, and some will file the return online for you.

The PAYE payments are just that - payments. You will have to do these yourself as your accountant cannot make payments from your company account for you. He should though prepare and file your year end returns for you.

It's highly unlikely that you will be asked to file your own accounts, especially when it becomes compulsory to file via iXbrl. The engagement letter will probably include preparation and filing with HMRC and Companies House.

Thanks for the reply Clare. Actually one of my friends' accountant does his PAYE/NIC for him. You need make payment for VAT as well. If you use this argument, then in theory everyone has to do their VAT return themselves as well.

[7of9]

Thank you all for your reply.

I am really shocked to find out I have to do so much filing after the accountant promised me that I only need to do my personal tax return and everything else will be taken care of by his company.

At the moment I was told not only I need to do my VAT filing , but also I need to do make NIL declaration online by myself. I don’t understand whether I need to file one or not. I am not taking salary until next April.

This is what my accountant said to me
"If you do not have any PAYE or NIC payments due in a quarter, then you must file a NIL return, and you can do this by submitting a NIL declaration online.

Please note that the PAYE/NIC is due by the 19th of the month of the quarter end. "

A stupid question: Is 19th of the quarter end 19th of this month? I hope not, as they only told me today