Client hasn't given me all invoices in time for VAT return.....

Client hasn't given me all invoices in time for...

Didn't find your answer?

I have taken on a new client (that I now wish I hadn't, but that's a whole new thread!) & i'm preparing his first quarter VAT return.

He appears totally useless with paperwork, and hasnt provided me with lots of invoices (mainly stuff he's spent on his numerous business credit cards).

At the moment, I'm holding this spending in a suspense account until he provides me with the invoices, when I will move the costs out of suspense & post appropriately. 

However, I'm now facing the probability that he will never find & send me all the required invoices in time for his VAT return....

I've not encountered this before (all other clients are hot on paperwork & aware that they need invoices to reclaim that VAT) - if my client sends me the invoices AFTER I've submitted this quarters vat return, can I process the VAT element on these through the next quarters vat return? I looked this up on HMRC website but, as usual, the advice isn't particularly clear....

Any advice much appreciated

Thanks

Replies (8)

Please login or register to join the discussion.

avatar
By sylou
08th Jul 2012 11:41

Yes you can

Yes purchase invoices can be claimed on the following return if the invoices aren't received in time.

I would make sure that all sales invoices are included on time though - these can also be included late but may then attract interest/penalties.

Thanks (0)
avatar
By darren.austin
08th Jul 2012 12:08

Limit of £10k

It doesn't sound like it will be the case but, if the total of the errors is over £10k, separate disclosure is required. See http://www.hmrc.gov.uk/vat/managing/problems/corrections/correct-mistakes.htm#2 

Thanks (0)
avatar
By alattax
08th Jul 2012 12:37

It sounds like you have evidence of payment and should be able to spot the business items. Your client will (probably) have had the invoices at some point and VAT could be claimed on that basis if he can confirm that they can be provided.

Of course the invoices should be available if there is any any inspection, and he would be better off making them available sooner rather than later. Though the VAT office will normally allow time after an inspection to provide copies of any invoices identified as missing at that time.

You need to explain to the client the penalties/interest if input claims cannot be substantiated at a later date, and he should confirm he wishes to take this route.

The credit card will normally be used for purchases such as car fuel and it usually will be all but impossible to obtain copies if this paperwork is lost.

Bear in mind that there is also a provision that alternative evidence of supply, other than an invoice, can be provided.

Of course, none of this is as cost effective for you or the client than providing all the invoices at the right time, which is when the return is being prepared.

Thanks (0)
By petersaxton
08th Jul 2012 13:28

Document the problems and decisions made

Ensure you explain in writing the problems you have encountered and that your client has agreed to the way forward you have suggested.

If there are problems in the future the client may try to blame you.

Thanks (0)
By Moonbeam
08th Jul 2012 13:58

Be strict on VAT invoices

My clients are very clear that if they don't give me a VAT invoice no VAT can be reclaimed on supplier invoices. Quite a few of them lob over orders, or proforma invoices. I tell them these are not VAT invoices and until I get the VAT invoice no claim will be made.

Of course it is the messy disorganised types that will give you this problem. I have a series of systems to cope with it all computer-wise so I can sort things out later. You will need this too.

Just don't give in to the client and point out that you are just obeying HMRC guidelines.

 

Thanks (0)
Replying to Cloudcounter:
avatar
By pdt7464
10th Jul 2012 07:31

VAT invoices

Moonbeam I believe that what you are saying is, in essence, absolutely right.  However, I would approach the client slightly differently.  The "I was only following orders" defence for our actions has been discredited.  The client may appreciate "I am trying to protect you from an HMRC investigation".  I would use this approach because I like my clients to see that I am acting for them not acting for HMRC.

Thanks (0)
avatar
By Barry Hawkins
09th Jul 2012 22:56

VAT invoices

I agree with Moonbeam an operate a very strict no VAT invoice, no VAT reclaim policy. Watch especially credit and debit card purchases, its surprising how many people can "accidentally" purchase personal goods on business cards but rarely use their personal cards to buy true business items. 

Thanks (0)
By Moonbeam
10th Jul 2012 08:13

Approach to Client

The tone of my previous comment was based on my feeling that in this sort of situation the client is very liable to act as a child and blame everyone else later except himself. I just cannot work with such people and often they wouldn't want to work with me.

I take pdt7464's point that whatever my point of view, if I were going to work for such a person I would sell it to them as "protect you" rather than "these are the rules".

A few years ago a company whose book-keeping I was doing had grown to a reasonable size and just wasn't sending me supplier invoices and I therefore couldn't claim back the VAT.

The MD was trying to do all the basic stuff himself in between rather important meetings. After a few telephone discussions and emails where I showed him that he was losing several thousand pounds worth of VAT per quarter because he wasn't giving me these invoices he finally understood and is now religious about giving me this information.

I do have a bit of a reputation for really sticking to my guns and just occasionally I think I have been a bit inflexible. On the other hand, my clients sail through VAT inspections and other HMRC inspections because of this attention to detail. Because mercifully such inspections are quite rare these days, unfortunately not many clients see for themselves the benefit of getting it right.

Thanks (0)