Hi,
I made a voluntary online VAT registration 2 weeks ago on 1st May 2014, and put Effective date of VAT registration as 1st April 2014 mistakenly, I wanted to put the date as 1st April 2011 as I am an IT contractor and my agency is willing to pay the previous VAT for last 3 years. If I write to HMRC about this mistake will they amend the date or it’s not possible now.
Replies (16)
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incorrect registration date
Write to HMRC asap, and explain the reason for the belated notification, as well and the error. Argue for mitigation of any penalty.
No penalty
There's no penalty for a voluntary registration.
You've not infringed any regulations.
You are right
There's no penalty for a voluntary registration.
You've not infringed any regulations.
Sorry, you are right, of course.
@lionfludesch.. Not Quite
There will be if VAT had been charged without registration.. This was the case with an acquaintance (an IT contractor) who charged VAT over a 2-year period because the agency advised her to do so but never declared the VAT as she 'forgot' to register!
Flat Rate
Incidentally, the Flat Rate Scheme may well be worth looking at for the OP. Much easier and quite possibly financially more rewarding that the traditional method.
Call them
I managed to backdate a VAT registration, I just called up the helpline and was put through to the Registration dept and they did it over the phone. You will need to be quick though since they normally process applications within a few weeks and the date cannot normally be changed once registered.
Please can you provide a few more details on why you want to do this and why the agent would bear the cost. If you are looking at the flat rate scheme then you obviously have not suffered much input VAT. Have you actually exceeded the threshold so the registration is not voluntary?
Have you taken profession advice? I assume you have an accountant.
But why?
Why would your agent bear the cost of 14.5% VAT which you have not charged clients, total £21,750, for no reason whatsoever? Please explain what you see to be the benefit of voluntary registration. I think it is quite fortunate that you did not register from 3 years ago. If the VAT number has been issued then I don't think you can change the date of registration.
Opening Post
Why would your agent bear the cost of 14.5% VAT which you have not charged clients, total £21,750, for no reason whatsoever? Please explain what you see to be the benefit of voluntary registration. I think it is quite fortunate that you did not register from 3 years ago.
As he said in the OP, his customer is willing to pay the extra VAT as they can reclaim it.
I've never had to change the date of registration - happily having never made that mistake - but I would hope that HMRC would accept the correction of an error if brought to their attention promptly.
Common Error
It is indeed a common error to forget that Flat Rate percentages are applied to the VAT inclusive invoices issued.
In effect, you should be comparing the 14½% flat rate - not with 20% - but the VAT fraction of 16.6667%