VAT registering process

hwalkerh

Hi

We filled out the VAT registration form on HMRC website last week. We are voluntarily registering as currently under the threshold but plan to go over it in the next 3 years.

Just wondered if anyone knows what happens next? I had expected a phone call or letter with in a week.
Any info on the process would be great

Premier_2

It currently takes around a month for HM Revenue & Customs (HMRC) to process applications for VAT registration, although it can take longer if they need to carry out additional checks...

If you are registering voluntarily, you must account for VAT from the date you asked for on your application form.

http://www.hmrc.gov.uk/vat/start/register/waiting.htm

martindow

If you are registering voluntarily, you must account for VAT from the date you asked for on your application form.

Does this mean the OP should collect VAT even if the registration has not been processed by that date? Surely you can't do that without a VAT number?

I would call the VAT helpline who I have always found very helpful to find out what to do and how your application is progressing

Premier_2

martindow wrote: »

If you are registering voluntarily, you must account for VAT from the date you asked for on your application form.

Does this mean the OP should collect VAT even if the registration has not been processed by that date? Surely you can't do that without a VAT number?

I don't think so.
The OP must account for VAT to HMRC from that time.
I don't think the OP should not be charging anyone VAT without possessing a valid VAT certificate.

I think the moral here is to ensure you apply for VAT registation in plenty of time

martindow wrote: »

I would call the VAT helpline who I have always found very helpful to find out what to do and how your application is progressing

That is a good idea, but I must say, imo, the support isn't as good as it used to be when local offices that dealt with such enquiries.

JasonLVC

When the OP applied for VAT, they will have specified a date to be VAT registered from. Even if it takes HMRC 8 months to process the application, the OP has to account for VAT from the date they originally specified.

But the OP cannot charge VAT without a VAT number and so there are two routes open to the OP :-

1. Charge a VAT inclusive price for now and then issue a VAT only invoice once they've got a number. OP normally charges £100 for their goods. They now charge £117.50 - not showing VAT or anything like VAT. Customer pays, OP now has £100 + £17.50 in his pocket. Once VAT registered, OP already has the £17.50 to pay HMRC so no cash flow problems.

2. Charge a VAT exlcusive price for now and then issue a VAT only invoice once they've got a number. OP charges £100.00 for their goods. Customer pays £100.00. When VAT number issued, OP issues invoice for £17.50 and can then pay this over to HMRC.

Both options are the only official ways of dealing with this one. Option 1 is essential if the customers are mainly B2C (ie, consumers) as you've got no chance of going back to Joe public with a VAT only invoice, three months down the line....so bill them a VAT inclusive price and then follow up with the VAT invoice later for paperwork purposes.

Option 2 will be preferred by other Business (B2B) as they cannot reclaim VAT without a VAT invoice and so a VAT inclusive invoice as in Option 1 means they have to pay out the full price but cannot get the VAT back until OP issues VAT invoice 3 months later....so OP will find B2B custoemrs will insist on Option 2.

Its a pain in the backside admin wise, but HMRC are generally fairly quick (2-3 weeks) unless the OP is in a high risk sector like mobile phones or take-aways.