Client not yet VAT Registered but should be

Accounting
1

Hi

I have a new client who should be VAT Registered but hasn’t got round to it yet.

How do i deal with the invoice/Income which have VAT on them?

Can I go back and update at a later date? or should i set up a temp VAT number?

It relates to more than one Qtr.

Thanks
Alison

2

You should wait for vat registration confirmation from HMRC, it will confirm which date vat apply from and which scheme. Depending on those factors invoices should be adjusted

2 Likes
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So should I hold off posting any invoices etc? Or post not split up till the point the turnover goes over the threshold?

Thanks

4

So they’re not over the threshold yet, so when you say they should be VAT registered what do you mean by that?

As @FaradayKeynes says, it isn’t about going over the threshold, it’s dependent on when HMRC say your VAT start date is. If you post invoices now then when HMRC give you your VAT start date you have 2 options, adjust any invoices in that period to reflect the VAT so the new gross total is the same or send follow up invoices for the VAT only.

5

They have told me they were over threshold in first month. Should i post as Not Vat till they reach threshold then register at this point with HMRC and change the status etc on Quickfile then? Sorry first client i have who isn’t already VAT registered and accounts go back to January 2020.

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You apply for VAT registered status with HMRC. You don’t change anything on Quickfile until HMRC come back with your VAT info, which will include your start date. Until then you continue as normal/as you are now.

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If you can work out the approximate date they reached the threshold when you enter your vat number into QuickFile you can set that date, QuickFile automatically updates all invoices that have ever been entered and then only accounts for invoices from that date as being applicable for vat.

8

That is incorrect, you do not enter anything until HMRC give you your VAT number and start date. You don’t “guess” and randomly turn it on, and even if you did you have no VAT number to enter.

1 Like
9

It is correct what I have said, enter your vat number. How can they do that is HMRC has not issue one. Where have I said guess, clearly says to work out the date you wnet past the threashold.

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I never said you said anything. I was responding to @Knitting4fun.

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You don’t have to register for VAT until after you pass the threshold, based on the previous 12 months taxable turnover.
Once you have passed it, you have 30 days from the end of the month to register with HMRC. They will then confirm your registration date - usually a month after that - and you then have to make sure from that date you apply VAT to your invoices.
You must not do anything until you have registered.
You can claim input VAT for pre-registration purchases upto 4 years prior for goods but only 6 months for services. However this is not done on QuickFile but will be a manual calculation and adjustment to the first VAT return.
See here for the HMRC guidance https://www.gov.uk/vat-registration

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