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VAT question on self billing

Brewery self billing client and adding VAT; trader is not VAT registered

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The client took over a pub in May-19 and I have now seen the first batch of paperwork. The deal is that the Limited company receives 20% of the take and is responsible for paying the staff wages out of this 20%.

Small problem is that the brewery has added on VAT and the Limited company is not VAT registered. Obviously, the VAT cannot be retained by the company so which route would you go down:

  1. Register the company from the 01 May-19 (it is a bit late)
  2. Repay the VAT to the brewery and register now.

As an aside is there even an obligation to register if the company is currently below the registration threshold, it seems that the brewery is dictating the VAT status through the self-billing.

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By paul.benny
14th Jun 2019 15:28

I’m surprised that the brewery has self-billed without obtaining the tenant/manager’s VAT number. That said, it’s the brewery’s error, so I would push it back to them to resolve rather than racking up fees trying to resolve with HMRC.

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