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VAT Registration....after reaching the threshold.

emmabable
  • Member PM.Dip
  • Practice Licence
  • 4 posts
  • # 82730

Hi...looking for a bit of advice from any fellow bookkeeper who has came across a similar situation.

I have a client whom I have just started working with, on completing their year end accounts in March, up until then their attempt at bookkeeping had been pretty poor to say the least, I recorded that their sales had reached and surpassed the VAT threshold and advised them to register immediately.  The VAT registration form asks them to disclose when they reached the threshold, which from the information I have managed to piece together appears to be December, what will be the next step for HMRC, do they backdate the registration, not sure as to how to proceed now?

Thanks in Advance.... 

  • Emma McDonnell 
    B-Able Business Services Ltd
    www.b-able.co.uk 


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kjmcculloch
  • 1159 posts
  • # 82752

I had something very similar recently.  I took on a client who thought they had passed the threshold, they had.  When we managed to untangle the paperwork it transpired that they should have registered in the May but we never got it sorted until the September.  If you tell HMRC when they passed the threshold they will then tell you what to make the period for the first return.  It's normally the second month following the month you should have registered.  If they went over the threshold in June the first day of your VAT period will normally be 1st August if I remember right.

They can impose a fine, but the client will get a form to complete before this.  I complete my clients and HMRC decided not to fine him.  I just made him out to be a complete idiot (with his blessing) and threw him at HMRC's mercy and it worked.

Good luck, but they will spell out exactly what they want from you and by when.  Remember to enter the pre-registration purchases and expenses.

Kris 
emmabable
  • Member PM.Dip
  • Practice Licence
  • 4 posts
  • # 82755

Hi Kris,

Thanks for your reply, the only thing I am wondering about is given the sales for this period have not been charge out with VAT applied, but yet there are no doubt expenses that they can claim back which do have VAT included, what do HMRC expect you to do with the output VAT which should have been charged?

Thanks

Emma 

  • Emma McDonnell 
    B-Able Business Services Ltd
    www.b-able.co.uk 


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kjmcculloch
  • 1159 posts
  • # 82756

If you've not charged it, then it comes out of the clients pocket.  The cost of the mistake.

I was lucky I suppose that my client was retail, so we just had to calculate what the VAT would have been using the till roll.  It still ended up that HMRC owed him, but if it had been the other way he'd have had to make it up.

I suppose if it's credit clients who are invoiced you could go back to them with a VAT only invoice, but there's a risk of losing them for the future.  Best probably for your client just to suck it up, and put it down to a learning experience.

Kris 
emmabable
  • Member PM.Dip
  • Practice Licence
  • 4 posts
  • # 82762

Hi Kris,

Oooh...well I knew it wouldn't be as straightforward as just declaring the date and starting from then onwards, better be prepared to be buried under a pile of invoices for the next couple of days to get to the bottom of it then...thanks for your input!

Regards,

Emma 

  • Emma McDonnell 
    B-Able Business Services Ltd
    www.b-able.co.uk 


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