Paying VAT

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Whilst i have applied for VAT registration i have not as yet receaved my VAT number. However i was advised to start charging VAT as on the application form it was put down for a start date of Feb 1st. This means i have now been charging VAT for three months.

As i believe it you pay your VAT every quarter.

How do you work out what VAT to pay the vat man ?. Is there a form sent out to you or is it up to you to work it out and send it to him ?.

So many questions :001_unsure:

Adam

 

[Scottish Business Owner]

Adam,

You cant issue a VAT invoice if you dont have a VAT number as far as i'm aware. You should submit the invoice inclusive of VAT but make mention of the fact that it includes VAT. You should then issue the VAT invoice as soon as you get the registration number.

Typically you will pay VAT quarterly and you do normally receive a VAT return unless you file online. As you dont have the VAT Reg number you wont get a return issued.

VAT as much as people make it out to be difficult is quite straight forward. You declare the VAT you have charged on sales and the VAT you have been charged on purchase. Take one from the other and this is what you owe the VAT man.

 

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So how would this work for me ?. My buiseness only charges VAT for the labour it provides and as i dont ever buy anything i never get charged VAT.

Adam

 

[Scottish Business Owner]

Well in that case you declare the VAT on the sales you make and thats what you owe the VAT man. That makes it even simpler.

I would advise you to speak to someone as per my comments above. You need to get a few issues sorted to avoid problems.

 

[Mike Lewis]

Adam,

My understanding is the same as 's : You can't charge VAT until your registration is confirmed and you have a VAT number. However, I disagree that "You should submit the invoice inclusive of VAT". If I've understood it right, that is specifically not allowed.

As for the mechanism for making the payment, don't worry about it. You'll get a quarterly return in due course, which you fill in and send off with your cheque (if any). You can also choose to do it on-line, but go with the paper form in the first instance. You can always switch to on-line once you've found your feet.

Having said all that, I would strongly advise you to get yourself a professional accountant who can guide you through all these issues. You'll get a lot of good advice here on SBF, but we can't match the knowledge of a proper advisor who understands your business.

Mike

 

[Boxby]

Adam,

My understanding is the same as 's : You can't charge VAT until your registration is confirmed and you have a VAT number. However, I disagree that "You should submit the invoice inclusive of VAT". If I've understood it right, that is specifically not allowed.

As for the mechanism for making the payment, don't worry about it. You'll get a quarterly return in due course, which you fill in and send off with your cheque (if any). You can also choose to do it on-line, but go with the paper form in the first instance. You can always switch to on-line once you've found your feet.

Having said all that, I would strongly advise you to get yourself a professional accountant who can guide you through all these issues. You'll get a lot of good advice here on SBF, but we can't match the knowledge of a proper advisor who understands your business.

Mike

Ditto advice re an accountant.

Re the invoicing - You invoice the gross amount, you don't refer to the VAT seperately on the invoice as you can't because you're not VAT registered. But a covering letter is no bad thing. Then when your VAT registration number comes in you reinvoice with a proper VAT invoice.

If I were you, I would take the amount due for the quarter so far and stick it in a seperate bank account, just so you know that its there ready for payment. There are a lot of small business that operate on a daily basis forgetting that the VAT element isn't "theirs" and then get their cashflows stuffed up at the end of the quarters.

 

[Adventurelife]

So how would this work for me ?. My buiseness only charges VAT for the labour it provides and as i dont ever buy anything i never get charged VAT.

Adam

No fuel? No work clothes? No vehicle? No insurance? No electricity ?

I have yet to see a business that does not get charged VAT in some form and hence you will be able to reduce your VAT bill