Have I dropped a major clanger?

Have I dropped a major clanger?

Didn't find your answer?

Hello, I went over the UK VAT threshold in December 2014. unfortunately I did not register VAT ( although I had been paying import VAT on the PURCHASE price of my products from day one.

I have not yet registered for VAT but am unlikely to drop below the VAT threshold again.

I have not spent the VAT AMOUNT OWED BUT AM I going to get hammered for this? Will I be able to claim back the import VAT paid this year?

I am also looking for a full time accountant.
Thanks

Sarah

Replies (19)

Please login or register to join the discussion.

chips_at_mattersey
By Les Howard
25th Jul 2014 17:59

Registration for VAT

You will not get 'hammered.' But you will be liable to a penalty for late notification of registration. Do try to have the penalty reduced.. HMRC will allow some mitigation.

You will be able to reclaim import VAT, assuming the invoices are dated in the period when you become registered. You can also reclaim VAT from before the date of registration. Check this link: http://www.hmrc.gov.uk/manuals/vitmanual/VIT32000.htm

If you wish to deregister, if you expect your turnover to remain below the threshold, then do so at the same time as you register.

If you wish to remain registered, then fine.

Thanks (1)
avatar
By cbp99
27th Jul 2014 10:46

December 2013?

Assuming you meant to say "December 2013" you are within the 12 month period for possible nil penalty for late notification, so don't hang about with getting registered.
 

Thanks (1)
Replying to stuartrobins:
avatar
By sarz92
25th Jul 2014 19:02

Sorry I did mean December 2013.......am I correct in understanding then that I will have to pay VAT at 20% from Jan 2014 and will be able to reclaim the Import VAT on these items ( which were purchased in November / December 2013? I do have the paperwork to support the import VAT I really need a professional to look after this and my accounts for the last tax year? What is the mechanism for getting someone who can help me out?

Thanks (0)
Replying to Wilson Philips:
RLI
By lionofludesch
26th Jul 2014 11:14

February

sarz92 wrote:
Sorry I did mean December 2013.......am I correct in understanding then that I will have to pay VAT at 20% from Jan 2014 and will be able to reclaim the Import VAT on these items ( which were purchased in November / December 2013? I do have the paperwork to support the import VAT I really need a professional to look after this and my accounts for the last tax year? What is the mechanism for getting someone who can help me out?

If you crossed the threshold in December, you've a month to register so you'll be liable from 1 Feb 2014.

If you're looking for an accountant, best say where you're based.  We're in sunny Yorkshire.

Thanks (1)
avatar
By User deleted
25th Jul 2014 19:04

If you are ...

... in West London/Heathrow area feel free to pm me

Thanks (0)
avatar
By wrightaccounts
25th Jul 2014 20:49

following OGA's lead
If you're in Norfolk, feel free to PM me!

Thanks (0)
avatar
By thacca
26th Jul 2014 10:44

or Essex

Private message me.

Thanks (0)
avatar
By sarz92
26th Jul 2014 11:34

Hi guys, north west England.....live in Central Cheshire but happy to travel a bit for someone who can get me through this minefield with minimum impact on profits.

Thanks (0)
RLI
By lionofludesch
26th Jul 2014 12:09

I like a day out .....

... but Central Cheshire's a bit far to be practical.

Thanks (0)
Replying to Wanderer:
avatar
By cparker87
26th Jul 2014 19:04

Do take care...

fawltybasil2575 wrote:

1] When did the business start ?

[2] Are you self-employed, ie not a limited company ?

[3] Have you registered the business with HMRC ?

[4] What is the specific nature of the business ?

[5] The roaring lion is correct with his date of 1 February 2014 as the date of compulsory registration [ie one month's "grace" is given after the taxable turnover has exceeded the registration limit in the previous 12 months] - that said, an earlier voluntary registration date may be advantageous, albeit a slim chance [one has to study the turnover and expenditure figures etc in order to make such a decision].

[6] You qualify [almost certainly] for the VAT Flat-Rate Scheme, which is often beneficial.

[7] What proportion [approx] of your customers are VAT-registered themselves ? [the answer wil of course probably be nil if you are a retail business, hence my question [4] above] ?

Basil.

When you do find an accountant, please be sure to question their assertion Flat Rate Scheme is going to be best for you. Under that scheme, you will not be able to reclaim the VAT paid on import via the C79 scheme. Basil is not necessarily wrong, as he rightly says such a decision is based on your figures, but you need to take real care over what advice you follow.

Also take great care if you purchase from intra-EC businesses (outside the UK) when considering the Flat Rate.

Thanks (1)
avatar
By Manchester_man
27th Jul 2014 00:48

I'm in Sale, near Altrincham so feel free to contact me via PM and ill be able to help.

Thanks (0)
avatar
By sarz92
27th Jul 2014 09:18

Answer  to the questions,

Answer  to the questions,

 

1 - Business started May 2012

2- I am registered as self employed but work on this business with a self employed parent.

3 - Registered as self employed with HMRC for tax year 2012/2013

4- I sell items imported from the US online.

5 - The second poster suggested I had 12 months to register for VAT after exceeding the threshold in December 2013....a couple of others have said it will be February 2014? 

If I do get fined is it likely to be in the 100s or 1000s of pounds?

7 - Almost all my sales are to private individuals.

Thanks again for the help on this

 

 

 

 

 

Thanks (0)
Replying to spilly:
avatar
By cbp99
27th Jul 2014 10:47

Date of registration

[quote=sarz92]

5 - The second poster suggested I had 12 months to register for VAT after exceeding the threshold in December 2013....a couple of others have said it will be February 2014? I

/quote]

I think I am  the second poster, so must apologise if I've caused confusion. Others are correct when they say that if you reached the threshold in December, you should have registered within 30 days of Dec 31st, and will be registered from Feb 1st.

What I was saying was that if you register now, you will have done so within 12 months of the date that you should have registered, hence the possible nil penalty.

Thanks (1)
Replying to NewACA:
avatar
By Manchester_man
27th Jul 2014 18:28

Basil Faulty's post is spot on and contains excellent advice.

Thanks (1)
Replying to andy.partridge:
avatar
By sarz92
27th Jul 2014 21:29

Clarification
Yes you are right We exceeded the threshold in 2013.
Sigh of relief re realistic fine ( will notify HMRC this week as soon as I have found an account ).
Also correct that self assessments have been filed by both parties.
Turnover 2014 looking like £200,000.

Thanks again for the input people.....any other pearls of wisdom greatly appreciated.

Thanks (0)
avatar
By bigmuggsy
27th Jul 2014 20:46

In the Liverpool area if you need an accountant, we have clients in Chester also.

Thanks (0)
avatar
By sarz92
29th Jul 2014 13:54

Hi Basil,
Thanks again.
Re 1. We did not file s business self assessment.....will look at that when we get an accountant.
2. The way sales rocketed we could not get away with saying Feb 14 onwards would have been less than £150,000.
3. Happy with the rolling 12 months VAT threshold

So if I advise that I need to pay VAT from 1/2/14 will I then be able to reclaim the import VAT on those items ( which were bought the previous month).

Thanks (0)
By coolmanwithbeard
01st Aug 2014 06:09

It's worth remembering...

Hi

 

It's worth remembering that any penalty is due on VAT owed in the penalty period. Often a first VAT return will show a refund due to stock on hand and or the first claim stuff (fixed assets purchased, services in previous 6 months etc) and if the first return isn't a refund then the penalty period can be and I have successfully argued no penalty as no VAT owed in the penalty period.

 

I'm in South Cumbria but would happily travel to mid Cheshire :)

 

Mike

Thanks (0)
avatar
By Tandle Accountancy
01st Aug 2014 08:48

Hi I am based in Greater Manchester, please PM if you want a quote for fees

Thanks (0)