Vat Registration

Registration date HMRC gave is 1 May. Can he invoice without charging vat before this date

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My client breached the VAT threshold at end of February. On the application HMRC gave me a registration date of 1 May. Does that mean he can invoice without charging VAT in what is left of April?

 

Replies (24)

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RLI
By lionofludesch
25th Apr 2024 17:56

Weird - it should be 1st April.

Is this some concession because they took so long to deal with your application?

What date did you put on your application?

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By Paul Crowley
25th Apr 2024 17:58

Yes.
Standard gap
Over limit in FEB
Notify by End Mar
Charge VAT after two months so 1st MAY

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Replying to Paul Crowley:
RLI
By lionofludesch
25th Apr 2024 18:09

Paul Crowley wrote:

Yes.

Charge VAT after two months so 1st MAY

Or first day of the second month following breach of the threshold?

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By taxdigital
25th Apr 2024 19:04

Back to the VAT law (Para 5, Sch 1, VATA) again:

A person who becomes liable to be registered by virtue of paragraph 1(1)(a) above shall notify the Commissioners of the liability within 30 days of the end of the relevant month (which in this case is February).

The Commissioners shall register any such person (whether or not he so notifies them) with effect from the end of the month following the relevant month or from such earlier date as may be agreed between them and him.

Relevant month is February so the effective date of registration should be 01 April, or earlier if agreed otherwise.

Unless agreed otherwise, the client is not a taxable person (s.3) up until 31 March so not VAT invoice till then.

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Replying to taxdigital:
RLI
By lionofludesch
25th Apr 2024 19:22

I have to say, I wondered when they changed it. It's only been 1st day of the second month for 51 years.

Anyway, the querist says HMRC say 1st May. Assuming that's the EDR on the certificate, what do we think about that?

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Replying to lionofludesch:
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By taxdigital
25th Apr 2024 19:32

This is what almighty HMRC have to say about it:
https://www.gov.uk/hmrc-internal-manuals/vat-registration-manual/vatreg2...

Edit: I must add that a VAT invoice obviously can’t be issued up until the date registered for VAT.

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DougScott
By Dougscott
25th Apr 2024 19:35

As long as it's not invoiced in advance then no VAT should be added pre the registration date (assume the application was filled in correctly).

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By johnthegood
25th Apr 2024 21:12

Registration date should be 1st April, HMRC have made a mistake or the application was incorrect, I don't see that ignoring that fact is a good idea.

Of course if you do ignore it you just start charging VAT from 1st May but if you get a VAT inspection chances are they will backdate to 1 April..

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By jvenegas16
26th Apr 2024 00:47

"On the application HMRC gave me a registration date of 1 May"

Have you seen the VAT certificate? It will state the effective date of registration, and VAT will apply since that date. And you get some information on the acknowledgment letter.

Your effective date of registration is the first day of the second month after you go over the threshold.

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By jvenegas16
26th Apr 2024 00:47

"On the application HMRC gave me a registration date of 1 May"

Have you seen the VAT certificate? It will state the effective date of registration, and VAT will apply since that date. And you get some information on the acknowledgment letter.

Your effective date of registration is the first day of the second month after you go over the threshold.

Thanks (0)
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By jvenegas16
26th Apr 2024 00:47

"On the application HMRC gave me a registration date of 1 May"

Have you seen the VAT certificate? It will state the effective date of registration, and VAT will apply since that date. And you get some information on the acknowledgment letter.

Your effective date of registration is the first day of the second month after you go over the threshold.

Thanks (0)
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By jvenegas16
26th Apr 2024 00:47

"On the application HMRC gave me a registration date of 1 May"

Have you seen the VAT certificate? It will state the effective date of registration, and VAT will apply since that date. And you get some information on the acknowledgment letter.

Your effective date of registration is the first day of the second month after you go over the threshold.

Thanks (0)
VAT
By Jason Croke
26th Apr 2024 08:20

Sounds like HMRC may have made an error with the EDR (if threshold breached at end of Feb).

HMRC don't "give you the EDR", the applicant determines the date of registration based on the answers they supply on the application form. If you select end of Feb as the date of breach of threshold then the system should automatically give you 01 Apr as the EDR.

That automatically set EDR can be overridden on the application form, so who did the VAT registration application and what date was showing on the application?

Bearing in mind the first VAT return submitted is always verified by HMRC and so there is a chance HMRC might pick up on the fact that the EDR is wrong when they are checking turnover, bank statements, etc.

Has the applicant tried to manipulate the EDR dates in order to slip through a chunky invoice in April so that it isn't subject to VAT? I only ask because it's rare (but not unheard of) for HMRC to get the EDR wrong, so more likely the applicant may have filled the form incorrectly/changed the date in error.

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Replying to Jason Croke:
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By bubsacola
26th Apr 2024 10:13

Hi. Thanks for your interest in this matter. My client's final invoice in February issued on 29th breached the threshold by £73 so I put 1 March on the application. He has not invoiced since this date but has carried out a considerable amount of work during March and April so the question is can he invoice for this work without charging vat

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Replying to bubsacola:
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By jvenegas16
26th Apr 2024 11:34

You should have entered 29th February as the end of the month when the business went over the threshold.
VAT will be charged on the sales from the effective date of registration, and not before, so not for March or April, in your case, as it stands at present, and as per your question.

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Replying to bubsacola:
RLI
By lionofludesch
26th Apr 2024 11:35

If you put 1st March, the EDR should be 1st March. But you applied to register him voluntarily for March.

I have no explanation why they've come up with May.

But the answer to your question is he's no obligation to charge VAT before the EDR. Whatever that is.

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Replying to lionofludesch:
VAT
By Jason Croke
26th Apr 2024 12:04

lionofludesch wrote:

If you put 1st March, the EDR should be 1st March. But you applied to register him voluntarily for March.

I have no explanation why they've come up with May.

But the answer to your question is he's no obligation to charge VAT before the EDR. Whatever that is.


Agree, no requirement to declare VAT before the EDR, but if the EDR is wrong then it needs correcting and if this wrong EDR was on purpose then that can get nasty very quickly.
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Replying to Jason Croke:
RLI
By lionofludesch
26th Apr 2024 12:21

Jason Croke wrote:

Agree, no requirement to declare VAT before the EDR, but if the EDR is wrong then it needs correcting and if this wrong EDR was on purpose then that can get nasty very quickly.

Definitely.

Thanks (1)
Replying to bubsacola:
VAT
By Jason Croke
26th Apr 2024 12:23

bubsacola wrote:

Hi. Thanks for your interest in this matter. My client's final invoice in February issued on 29th breached the threshold by £73 so I put 1 March on the application. He has not invoiced since this date but has carried out a considerable amount of work during March and April so the question is can he invoice for this work without charging vat


So client breached threshold end of February with an effective date of registration from the 01st April.

But you over rode that and told HMRC that the client breached the threshold on 01st March and as the turnover test only looks at the end of each month, then HMRC have seen your 01st March date as meaning threshold breached at end of March with an EDR of 01st May.

Are you really an Accountant or are you the business owner who has potentially made a fundamental error...I only ask because your follow on question about whether VAT should be charged on March/April work cannot be answered until the EDR point is resolved....and i don;t see that the EDR issue has been resolved as yet.

As Accountants are potentially liable for errors they make, it'd be unusual for an Accountant who has potentially got the EDR wrong to double down on that potential error by ignoring the EDR date issue and moving straight onto whether or not to charge VAT on invoices for March/April.

Plus we don't know if client sells goods or services or if services, whether they fall under the continuous supply rules or the basic tax point rules.

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Replying to Jason Croke:
RLI
By lionofludesch
26th Apr 2024 12:32

I might have waited until March to issue that last invoice.

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By rmillaree
26th Apr 2024 12:54

My client breached the VAT threshold at end of February. On the application HMRC gave me a registration date of 1 May.

this makes no sense this shouldnt be possible - are you sure the date used wasnt end of march ?
cant ever remember the vat office having got it wrong like this before - perhaps there is a first for everything though

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Replying to rmillaree:
VAT
By Jason Croke
26th Apr 2024 13:01

rmillaree wrote:

My client breached the VAT threshold at end of February. On the application HMRC gave me a registration date of 1 May.

this makes no sense this shouldnt be possible - are you sure the date used wasnt end of march ?
cant ever remember the vat office having got it wrong like this before - perhaps there is a first for everything though


Later in the thread OP states that they manually entered the date the threshold exceeded to 01st March (instead of 29th February which was the correct date of threshold being breached) and so the EDR is correctly 01st May based on what OP has told HMRC.
Thanks (1)
Replying to Jason Croke:
RLI
By lionofludesch
26th Apr 2024 13:12

Jason Croke wrote:

Later in the thread OP states that they manually entered the date the threshold exceeded to 01st March (instead of 29th February which was the correct date of threshold being breached) and so the EDR is correctly 01st May based on what OP has told HMRC.

Ah - I've misinterpreted what we were told!

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DougScott
By Dougscott
26th Apr 2024 17:08

Reading all the posts the OP has clearly completed the application wrongly so his client should be charging VAT on all invoices issued after 31 March. The OP needs to get the date corrected with HMRC to 1 April as the registration date.

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