VAT Registration - Urgent advice needed please...

New 2023 business - need VAT advice please

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Hello, 

Wondering if you can help please?

I became LTD in April - I've turned over 75k so far but some invoices have been over 10k per month per client, including my first ever invoice. 

I have just been told about the rolling monthly VAT and any invoice over 7k should be liable to VAT? Meaning I have to backdate it to when I started by business?

Do I need to pay VAT from the outset as I thought it was when you reach a total of 85k and any invoices after that amount?

Any advice greatly received, thank you. 

Replies (9)

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By David Ex
21st Nov 2023 21:03

Payneeee wrote:

Any advice greatly received, thank you. 

Do what you should have done when you started, appoint an accountant.

https://find.icaew.com/

Other professional bodies are available.

Thanks (2)
Replying to David Ex:
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By Payneeee
21st Nov 2023 21:16

I have got one…that’s why I’m petrified and seeking advice to compare it to what I have just been told by them.
They set me up but then left me alone until I reached out to ask about VAT.
I’ve done all my own invoicing and expense recording.
I’m new to this so researching. Any advice greatly received thank you.

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Replying to Payneeee:
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By FactChecker
21st Nov 2023 21:32

Can't make head nor tail of what you think your accountant has told you ... but "I thought it was when you reach a total of 85k and any invoices after that amount" is wrong.

The simplistic (i.e. GOV.UK) guidance opens with:
"If you make taxable supplies in the UK, you’re liable to register if:
* at the end of any month, the value of your taxable supplies in the previous 12 months or less is over the registration threshold;
* at any time, you expect the value of your taxable supplies in the next 30 day period alone, to go over the registration threshold."

There's a lot more of this basic stuff in HMRC's "Notice: Who should register for VAT (VAT Notice 700/1)" ... which you can find through Google more easily than by me trying to break this site in order to publish the URL.

Have a read ... and then discuss with your accountant in order to see who has misunderstood/miscommunicated (and to identify the greater details of which you need to be aware).

Thanks (3)
Replying to Payneeee:
By ireallyshouldknowthisbut
22nd Nov 2023 09:31

Payneeee wrote:

I have got one…that’s why I’m petrified and seeking advice to compare it to what I have just been told by them.
They set me up but then left me alone until I reached out to ask about VAT.
I’ve done all my own invoicing and expense recording.
I’m new to this so researching. Any advice greatly received thank you.

if your accountant is rubbish, and many are, get a better one. Its 100% their job to help you with this stuff and keep explaining it until you understand it.

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DougScott
By Dougscott
21st Nov 2023 23:11

You have to keep a track of your turnover for the last 12 months (rolling year) and if it reaches £85000 or you expect it to reach £85k then you have to register. You do not have to account for VAT up to that point but must do so once you are registered. There are penalties for not registering at the right time. You've got an accountant, hopefully a decent one that you trust, send them a list of all your sales invoices and invoice dates and he/she can advise.

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Replying to Dougscott:
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By Payneeee
22nd Nov 2023 02:56

Thank you, this makes total sense, I was told I would have to reclaim Vat from my clients for reaching the threshold as some months I was billing for 20k. But sounds like it’s just moving forward. Thank you

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Replying to Payneeee:
RLI
By lionofludesch
22nd Nov 2023 07:37

Payneeee wrote:

Thank you, this makes total sense, I was told I would have to reclaim Vat from my clients for reaching the threshold as some months I was billing for 20k. But sounds like it’s just moving forward. Thank you

You can do that if you want. But make sure your customers agree to pay before you take that decision.

You have to register from the first day of the second month after that in which you cross the £85000 threshold. In other words, you get a free month to register.

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By Leywood
22nd Nov 2023 10:06

There appears to be a very clearly a mis-understanding by the OP of what the Accountant is suggesting. So OP needs to go back to their Accountant or find another one.

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Replying to Leywood:
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By paulwakefield1
22nd Nov 2023 13:22

My suspicion is that the accountant probably said something along the lines of "if your turnover is over £85k in the preceding 12 months i.e. averaging over about £7k per month then you need to register". Either badly put or misinterpreted (and probably not a very helpful observation anyway if, as appears to be the case, the turnover is very lumpy).

Speculation on my part of course.

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