Crossing VAT threshold/ future quoted work

[deezyboy]

Evening all,

 

im crap at paperwork, and just sat down this evening and worked out that by some miracle I have managed to realise before it happens, that rolling from December 2019- December 2020 I am actually going to cross the VAT threshold. I will register to go VAT registered this week. 

How does this effect jobs that I priced and won in November and have booked in for January etc? Do I need to contact them all and explain/ apologise that the bill will be increasing (for private customers anyway) 

its a bit daunting as a fair bit of my work is private residents but I’ve got to take it as a compliment I suppose.... I don’t have any problems paying the other tradesman I use VAT, so I hope my customers don’t either.

 

thanks 

[Steve Bullman]

2 minutes ago, deezyboy said:

Evening all,

 

im crap at paperwork, and just sat down this evening and worked out that by some miracle I have managed to realise before it happens, that rolling from December 2019- December 2020 I am actually going to cross the VAT threshold. I will register to go VAT registered this week. 

How does this effect jobs that I priced and won in November and have booked in for January etc? Do I need to contact them all and explain/ apologise that the bill will be increasing (for private customers anyway) 

its a bit daunting as a fair bit of my work is private residents but I’ve got to take it as a compliment I suppose.... I don’t have any problems paying the other tradesman I use VAT, so I hope my customers don’t either.

 

thanks 

Just ask them if you can backdate the invoice, job done

[Steve Bullman]

Actually, not sure if it is job done! You might end up getting a bill from the vat man if you have gone over the threshold already in November. Not 100% how it works to be honest...not even 50% to be even more honest.

[deezyboy]

Agreed, I’m also sat here now working it out. I think ultimately unless i’m Clever I will end up with a bit of a bill to pay. I think I am going to have to contact everyone and see if they would consider paying the extra even though they are not obligated too. 

[eggsarascal]

6 minutes ago, deezyboy said:

Agreed, I’m also sat here now working it out. I think ultimately unless i’m Clever I will end up with a bit of a bill to pay. I think I am going to have to contact everyone and see if they would consider paying the extra even though they are not obligated too. 

Speak to your accountant before you do anything, that's why you pay them.

[deezyboy]

I will also be getting an accountant tomorrow, as well ?

[dig-dug-dan]

You dont have an accountant? Oh dear.

You know that the threshold limit is worked out over a rolling twelve months?

It is possible with some adjustment that you could be under it?

If not, dont panic, you can claim back four years of vat from capital expenditure, so they could end up owing you!

[nepia]

8 hours ago, deezyboy said:

I will also be getting an accountant tomorrow, as well ?

Worth getting him/her to go back of X years' accounts:  my business turnover and pension added together come to only a moderate amount and for accountant's fees of £500 for just the last year he's won me a tax rebate of just over a grand.

[deezyboy]

1 hour ago, dig-dug-dan said:

You dont have an accountant? Oh dear.

You know that the threshold limit is worked out over a rolling twelve months?

It is possible with some adjustment that you could be under it?

If not, dont panic, you can claim back four years of vat from capital expenditure, so they could end up owing you!

I know it isn’t the smartest move, but I rightly or wrongly still view myself as a ‘small guy’ so up until now have been trying to streamline costs (I appreciate that they often save you what they cost you, but I’m stubborn)

 

but yes, it is the rolling 12 months which has caught me out. I am currently fine but will go over with the very next invoice that I send. 

 

Am am I right in thinking that I don’t have to charge vat until the first day of the second month, ie: if I register in December 2020 then not collect vat until 1st Jan 2021? This way my current jobs pending to be carried out in December  and work that I haven’t invoiced for yet, should be unaffected to avoid charging customers extra/forking out the VAT difference from my own pocket.

[Paddy1000111]

Definitely get an accountant. I pay £600 a year for mine and he does everything for me. Just send him my company bank info and what I've spent on what. I worked it out and he saved me around £11,000 in tax for 19/20 compared to if I was an employee on PAYE at a company. Of course I have expenses etc which accounts for a lot of that, but a good accountant will easily pay for their bill by being tax efficient