Backdated VAT Registration

THammond

My client's VAT Registration has been backdated to February 2022. I am aware that we can claim the VAT on his expenses from that date. Do we have to amend sales invoices to include VAT (this will obviously result in him losing money as he didn't charge his clients VAT and can't now go back and ask them for more money)

douglasstroud

What do you mean it has been backdated, did HMRC do this or did you or the client?

THammond

HMRC backdated it

douglasstroud

Well then it must have been because he had breached the threshold and not registered, so yes he will need to pay the VAT on all his sales at the appropriate rate from that date, what type of business is it? If his clients are VAT registered he might be able to reissue the invoices with VAT as they can claim it back.

THammond

He does property maintenance and sadly his clients aren't VAT registered

douglasstroud

That is the importance of keeping a check of the rolling 12 month turnover so that when the VAT threshold is breached the client is aware and registration can be applied for, otherwise a costly mistake to make.

THammond

Unfortunately he only approached me a few months ago. Thank you for your advice

douglasstroud

No problems, also have a look at the rules regarding claiming back VAT on goods bought up to 4 years before registration and services up to 6 months before, these may help in reducing the amount to repay.