VAT Threshold rolling 12 months

[evergreen]

Hi Guys

I took my eye off the ball and thought this was worth posting.

 

I assumed (bad man) that the £70000 VAT threshold was based on your tax year. How foolish of me. Its based on a rolling 12 month period.

 

This has caught me out as I thought we might reach it by end Feb, early March (based on financial year)

 

Well we hit it and sailed right past it in November, and didnt even notice. December was rubbish but on a rolling 12mth period we are still over it and forecast to be so from now on.

 

We have now(today) registered. But all income for some of November, all of December, I will be liable for VAT even though I havnt charged my clients it on invoices.

 

Further more IR might fine me, for being a numpty!!

 

PLEASE EVERYONE DONT BE AS STUPID AS ME!!!!

 

Cheers Nick:001_smile: Still smiling!

[skyhuck]

Are any of your previous clients VAT registered??

 

If they are and if they are agreeable you can charge them the VAT retrospectively.

[gensetsteve]

I was told recently that you could no longer have your wife as a business partner and double your thresh hold. No body from the IR has confirmed this so it may be worth looking into.

[skyhuck]

I was told recently that you could no longer have your wife as a business partner and double your thresh hold. No body from the IR has confirmed this so it may be worth looking into.

 

I'm sorry mate, but thats just plain wrong, a business, is a business, regardless of how many owners, partners, shareholders or any other involved parties.

 

The VAT threshold applies to any ONE business regardless and always has done.

 

The only way what you describe could work, is if you and your wife both ran separate businesses and registered them both.

[Greg]

Spot on Skyhuck, couldn't have phrased it better.

[kernowstu]

i think iam right in saying that you can back claim 3years on all purchases also open a 2nd bank account to keep vat back, because as a small company you will end up using the vat as working capital (trust me i know:blushing:)

[volvo]

Get a good accountant and he will advise and might also save you money.

They are often worth there charges

Edited January 5, 2011 by volvo

[samarb]

Having your wife involved is only beneficial for tax purposes so you don't end up paying higher rate tax. Your accountant will be able to go back two years and may be able to make it more bearable if you have made any purchases of a large nature other than that you ate liable for any amount that should of been charged. If you are mainly firewood then thus will be beneficial if you buy hardwood in.

[John Russell]

People have made some good points.

 

Re., Volvo's point about a good accountant: find an accountancy firm who is not a 'one man band'. Most good accountants actually employ a person as a tax specialist who is ex-HMRC. They will know all the right jargon to talk to the VAT office. A good, small accountancy firm with the right specialists can actually save you a lot. It can be a false economy to go with someone who works out of their back bedroom. A good accountant should have warned you in advance about the pitfall you have fallen into (if that's in fact the case).

 

Let's hope kernowstu is right that you can claim back vat on previous purchases. It might even be for the best and you increase your profit!

 

Best wishes,

 

John Russell

[Highland Forestry]

People have made some good points.

 

Re., Volvo's point about a good accountant: find an accountancy firm who is not a 'one man band'. Most good accountants actually employ a person as a tax specialist who is ex-HMRC. They will know all the right jargon to talk to the VAT office. A good, small accountancy firm with the right specialists can actually save you a lot. It can be a false economy to go with someone who works out of their back bedroom. A good accountant should have warned you in advance about the pitfall you have fallen into (if that's in fact the case).

 

Let's hope kernowstu is right that you can claim back vat on previous purchases. It might even be for the best and you increase your profit!

 

Best wishes,

 

John Russell

 

When I registered for VAT quite some time ago you could only claim back VAT on purchases etc, for the previous 6 months.... that might have changed now but I'm not sure on it.