VAT help

Essexgal

Hi,

Not sure if this is the correct forum to ask this but....

A friend of mine will be self empoyed as from June and I spoke to him about registering for VAT. His turnover will be around the threshold so when would be the best time for him to register and if he leaves it a while before registering will he have to pay backdated VAT on sales since he become self employed.

Hope that makes sense:001_tongue:

Thanks

Jan

Hi

You may find this link helpful http://www.hmrc.gov.uk/vat/vat-registering.htm

If he knows that turnover will be near the threshold it's better done sooner rather than later, as VAT will be due on his sales invoices from when he went over the threshold. If he leaves it late, then he will be liable to pay the VAT on invoices he should have charged VAT on. Its unlikely he will be able to pass this on to customers already invoiced. Remember also that it is a rolling 12 months, not his financial year that counts.
On the plus side he will be able to claim VAT back on some purchases made within the last three years, but again rules apply so look check that on the HMRC website.

Essexgal

Thanks very much, that was very helpful