VAT effective date of registration

VAT effective date of registration

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Clarification regarding VAT effective date of registration.

Example:

Exceed threshold in April

Labile to register 30 April

Must notify HMRC by 30 May

Effective date of registration will be 1 June

Does that mean that all the invoices you raise during April and May, you do not need to pay VAT on, even through the sales are over £77,000 for the 12 month period?

Replies (13)

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By hkfinancials
01st Aug 2012 17:15

You don't charge Vat on

In fact you do not charge Vat on your sales in April and May and hence do not pay it to the HMRC.

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By petersaxton
01st Aug 2012 17:40

That is correct

By the way, I looked on HMRC website and I can't see the rules about when you have to register by. I'm sure they used to be there.

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Replying to stepurhan:
Universe
By SteveOH
01st Aug 2012 18:06

They take a bit of digging out

petersaxton wrote:

By the way, I looked on HMRC website and I can't see the rules about when you have to register by. I'm sure they used to be there.

I remember trying to find this information a while back. It was buried in one of the Vat Guides. You would think that it would be in a prominent position at the top of the main Vat web page; it is such an important date to know.

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By petersaxton
01st Aug 2012 18:19

When to register for VAT!?

Then it doesn't say!

http://www.hmrc.gov.uk/vat/start/register/when-to-register.htm

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By Tim Charles
02nd Aug 2012 23:59

Thanks for the clarification.

You do not charge VAT on sales in April and May - period of grace.

Just seems like such a big give away by HMRC, as the business could make sales of c.£50,000 during those 2 months, so the total 12 month period may add up to £127,000 by the end of May, before starting to charge VAT after the effective date of 1 June.

 

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By petersaxton
03rd Aug 2012 06:21

Not £127k in 12 months

The £77k is for 12 months so the next two months make your figures for 14 months.

HMRC have to give you some time to gear up for VAT registration. If you have sales of £77k in 12 months then you are likely to only have sales of £13k or a little more in those two extra months. I think HMRC are understanding the two extra months when setting the threshold. They can't expect you to calculate and register immediately.

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By Tim Charles
06th Aug 2012 12:52

Thanks again for the comments, however I have had conflicting advice, via email from a VAT inspector, who is currently under going compliance checks with another client of mine.

Copy from her email:

>"Put very simply-:

 

>The company becomes liable to be registered from the point at which they will or have exceeded the registration threshold. All invoices from this point should include vat.

 

>The company should then be registered with effect from the end of the month following the relevant month, or from an earlier date which can be agreed between HMRC and the company.

 

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By ShirleyM
06th Aug 2012 12:59

Badly phrased, but correct when put in the correct order

The company becomes liable to be registered from the point at which they will or have exceeded the registration threshold. All invoices from this point should include vat.

>The company should then be registered with effect from the end of the month following the relevant month, or from an earlier date which can be agreed between HMRC and the company. 

 

Should be:

The company becomes liable to be registered from the point at which they will or have exceeded the registration threshold.

The company should then be registered with effect from the end of the month following the relevant month, or from an earlier date which can be agreed between HMRC and the company.  

All invoices from this point (the date of registration) should include vat. 

  

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Replying to cheekychappy:
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By lechiffre
06th Aug 2012 15:14

Clarity

ShirleyM wrote:

The company becomes liable to be registered from the point at which they will or have exceeded the registration threshold. All invoices from this point should include vat.

>The company should then be registered with effect from the end of the month following the relevant month, or from an earlier date which can be agreed between HMRC and the company. 

 

Should be:

The company becomes liable to be registered from the point at which they will or have exceeded the registration threshold.

The company should then be registered with effect from the end of the month following the relevant month, or from an earlier date which can be agreed between HMRC and the company.  

All invoices from this point (the date of registration) should include vat. 

  

Totally correct, the key date from which you account for output VAT is the date of registration if voluntary or the date the tax payer SHOULD have registered in a compulsory case.

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By pembo
06th Aug 2012 13:02

the email advice

is both contradictory and incorrect. You can only charge VAT when you receive a VAT number from HMRC and only then from the date of registration.

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By Lycurgus
06th Aug 2012 13:59

This is what happened to my client...........

Because we were aware that VAT registration was imminent the client and I were monitoring his Sales daily and realised in April 2012 that he would need to be registered on May 10 2012 (the day he would raise Aprils invoices)

I duly applied online in mid April and sat back awaiting the VAT number. Couple of weeks passed and then I received a questionnaire from the local VAT office, seems a flag went up because of the nature of his business! Filled in and returned this, 2 weeks later a phone call was received to arrange a visit from the local VAT officer.

Ten days later visit took place, all went well.

Letter received to say all was ok and effective date of registration was 10 May 2012

VAT certificate arrived about 10 days after this and first VAT return was for the period 10 May 2012 to 31 July 2012, with returns monthly thereafter.

All invoices from 10 May 2012 were added up and each customer notified by post enclosing a VAT only invoice (and copy of the VAT cert) - all have paid and everyone is happy.

All makes sense to me

Although the time it took was ridiculous and luckily all his customers are VAT registered

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By bocsta
06th Aug 2012 14:02

You become liable for VAT from the date you must be registered or asked for your voluntary registration to start, not the date that you actually apply for registration or the date you receive your VAT registration number.

 

http://www.hmrc.gov.uk/vat/start/register/waiting.htm

 

 

 

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