VAT Registration

jilt
jilt Registered Posts: 2,903
I have just inherited the following client:

Limited Company registered in the UK, carries out consultantcy services for the oil and gas industry. Recomenced trading in November 2011.

Company invoices another UK company for work carried out in the Far East. Invoices raised and paid in pounds sterling.

Sole director of company generally spends 6 week in the Far East followed by 2 weeks in the UK, then every 3rd visit 4 weeks in the Far East and 2 weeks in the UK.

Under UK vat rules this client should be registerd for VAT, first month's turnover was £10,600, and turnover to end of April 2012 is £58,419.

I have 2 questions:

Are there any special rules that I don't know about that says he does not need to registar for VAT? I would say the place of supply is the UK.

If he has to registar from the beginning of November I believe he cannot restrospectively invoice his client for the VAT as he did not put 'VAT registartion pending' on his invoices. Have I got this right?

Comments

  • Monsoon
    Monsoon FMAAT, AAT Licensed Accountant Posts: 4,071 ? ? ?
    UK company invoicing UK company - I believe this is normal UK VAT, yes, but overseas VAT does my head in.

    Why does he have to register from the beginning of November? Sounds like he's not yet his the threshold.

    Re the invoicing query, I've never heard of that and I would raise the invoices if needed and see what happens. I believe the client is within their rights not to pay it if the didn't know VAT would apply, but they will get VAT relief if registered if they do pay it.
  • jilt
    jilt Registered Posts: 2,903
    Thanks Monsoon, because his invoice for work done in November was £10,600 then it should have been evident that he was going to hit the threshold within the next 12 month period. In which case should he not have registered for VAT straight away or have I misinterpreted this?
  • Monsoon
    Monsoon FMAAT, AAT Licensed Accountant Posts: 4,071 ? ? ?
    jilt wrote: »
    Thanks Monsoon, because his invoice for work done in November was £10,600 then it should have been evident that he was going to hit the threshold within the next 12 month period. In which case should he not have registered for VAT straight away or have I misinterpreted this?
    That's not my understanding of it, though I have been known to be wrong :)

    In my understanding you either ,a) have to register when you hit the threshold in the previous 12 months or b) have to register if you're going to invoice the threshold in the next 30 days alone.
  • Monsoon
    Monsoon FMAAT, AAT Licensed Accountant Posts: 4,071 ? ? ?
    Supplying goods or services within the UK. If your turnover of VAT taxable goods and services supplied within the UK for the previous 12 months is more than the current registration threshold of £77,000, or you expect it to go over that figure in the next 30 days alone, you must register for VAT. However, if your turnover has gone over the registration threshold temporarily then you may be able to apply for exception from registration

    source
  • jilt
    jilt Registered Posts: 2,903
    Yeah found the notes now. Don't know why but I had it in my head he had to register if he expected to go over the threshold in any 12 month period. Doh!

    Basically he'll have exceeded the threshold when he raises his June invoice so he'll have to register by the 30th July and his registration date will be 1st August.

    Thanks Jenni
  • Monsoon
    Monsoon FMAAT, AAT Licensed Accountant Posts: 4,071 ? ? ?
    That sounds more like it :)
  • jilt
    jilt Registered Posts: 2,903
    Jesus how embarrassing, I've had that in my head for ages that you had to register once it looked like you would go over the threshold within any 12 month period. Good job it didn't come up before with any other client!

    Better head for the dunce's corner :blushing:
  • Monsoon
    Monsoon FMAAT, AAT Licensed Accountant Posts: 4,071 ? ? ?
    jilt wrote: »
    Better head for the dunce's corner :blushing:
    Like dis?

    woman_facing_corner_with_dunce_cap_1800581.jpg

    Kidding. Don't worry about it; no harm done and you will definitely remember it now :):lol:
  • jilt
    jilt Registered Posts: 2,903
    Hahahahahaha :lol::lol:
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