Supplier will be VAT Registered in a few months

antonic

In fact most (if not all ) businesses, when they submit their first VAT return is a CLAIM return (ie they are due a refund due to the expenses of setting up the business), then they start to generate cashflows by becoming VAT due when the business becomes successful.

Then the fun starts of getting payment out of them !

chrismac1 wrote: »

"I prefer bonkers to the country being broke."

My point is that this pedantic approach to issuing numbers makes the public sector cash flows worse not better. Get the UTRs and VAT numbers out within 3 days of the requests, in 90% of cases these numbers are going to produce cash flows from the taxpayer to the Treasury.

For the other 10%, have enough staff so that you can make phone calls to them and if necessary go round there. In the case of VAT, you could ask them for a schedule of the supplier invoices they wanted to reclaim VAT on. This seems like commonsense to me, if the supplier invoices all come back "Zimbabwe IT Inc" then you're not going to issue the cheque. Again, having a schedule of invoices gives you the chance to call up any businesses on the list you think might not be legitimate.

The system as it is was just about OK when HMRC was properly run. Now that HMRC is a shambles and routinely takes months not weeks just to answer mail, the extra burden being imposed on legitimate businesses having to wait in limbo land for 3 or 4 months is unacceptable.

JasonLVC

The OP's suppplier is not currently VAT registered, probably awaiting their VAT number.

The date of the suppliers registration will be the date they put on the application form when they registered, so if they asked for a VAT registrtaion date from 01 May 2011, they cannot issue any VAT involves until they get the VAT number, but once HMRC issue it to the supplier, the supplier can then go back and reissue VAt invoices from 01 May onwards. They cannot go further back than 01 May though.

So OP, not an unusual scenario - at least the supplier is doing it correctly, not charging VAT for now but reserving the right to charge you VAT retrospecitvely once they get their number.

JasonLVC

chrismac1 wrote: »

If I sound bitter, it is because a car dealer client had a near miss. He rang them in August 2010 to register. Luckily he listened to my words of warning about HMRC and took the name, phone number he rang, tax office the HMRC was physically in, date and time of call. So in January 2011 when HMRC rang to fine him for late registration we had them banged to rights, most car dealer guys new to VAT would be staring a hefty VAT bill in the face with no chance of recovery from customers.

Note this VAT application took over 4 months to issue. 4 months in limbo land. How hard can it be to issue an 8 digit number?

Sorry, over 70% of applications are processed within 10 days. The delays for the other 30% is usually down to errors on the VAT application form itself, made by the applicant (like missing off telephone numbers or not listing all their other business connections).

http://docs.google.com/viewer?a=v&q=cache:56JU-LRUpMoJ:customs.hmrc.gov.uk/channelsPortalWebApp/downloadFile%3FcontentID%3DHMCE_PROD1_031350+JVCC,+vat+registration+delays+2011&hl=en&gl=uk&pid=bl&srcid=ADGEESjwlUITL_PIz0Zj2eT3mosQheAxaLjtJrBgCkydoGAl5YXOqC0IriCJMj1TPq4sRn9w1GLMHXZSiKCQVICje_jDm-y0Ez7vxW0G9JiWyN6L32z18sJOmCA-5SVdcxHtzX6wc61q&sig=AHIEtbRi1Kt2qMLvzEWbLdNF9kHMgaM86g

I can usually get a VAT registration approved in less than 7 days. Like most things in life, it comes down to knowing how to fill in the form properly and to respond to HMRC queries straight away. I had a new client the other week who had submitted an apllication in February 2011, still not registered. Looked at his application it was a mess, HMRC had asked for more information and he'd ignored them, twice. Then he was ranting about how craap HMRC were when the problem lay directly with himself by refusing to respond to the simple request to confirm their home phone number and NI number.

JasonLVC

chrismac1 wrote: »

My point is that this pedantic approach to issuing numbers makes the public sector cash flows worse not better. Get the UTRs and VAT numbers out within 3 days of the requests, in 90% of cases these numbers are going to produce cash flows from the taxpayer to the Treasury.

The system as it is was just about OK when HMRC was properly run. Now that HMRC is a shambles and routinely takes months not weeks just to answer mail, the extra burden being imposed on legitimate businesses having to wait in limbo land for 3 or 4 months is unacceptable.

When you say HMRC, do you mean the VAT side or the Tax side? I say this becuase I have never had to wait more than 14 days for a response from HMRC (VAT), the exception being clearances/rulings, which take a little over a month. The only time it gets dragged out for me is when we're litigating in a Tribunal/EU Court when it drags on forever but that is more to do with the legal process rather than some admin bod in an office at HMRC.

Besides, I find a little courtesy and a gentle reminder/nudge before a deadline works wonders in getting HMRC to do stuff for you. I saw a letter from an Accountant recently, to HMRC, following an inspection their client had had. The first three paragraphs were about why HMRC should not be picking on their client and dealing with 'proper' things like Vodafone and tax avoidance(!?). Like the Officer cares, but it sets the wrong tone for what is esentially a letter about seeking to resolve a matter amicably....especially when the client hadn't kept proper records and was suppressing their takings by about 25%! - the letter should have been opening a negotiation on a fair and reasonable settlement, not about how HMRC shouldn;t be picking on their crooked client.

chrismac1

You've been lucky. I've had the car dealer take 4 months then get accused of late filing, and a pub client take over 6 weeks. On self-assessment it seems routine to take at least 6 weeks just to issue the number. Not to mention the interminable problems getting approved as an agent on VAT - with 5 pieces of data to complete, for many clients this is a bridge too far. Even when you get a client to call up the online folk and give them permission to talk to you they sometimes still jobsworth you when you call up.

antonic

Because of a little thing called the Data Protection Act HMRC have to be very careful about who they disclose information to, even if they have verbal authority to disclose - remember the case of Lord Levy when someone impersonated his accountant to access his income tax records ?.

Would you like having your details being disclosed to anyone who rings up ? - I wouldnt for one.

chrismac1

The client calls up and says "I give you permission to speak to Mr X of X Accountancy, who is my accountant and I want to be my VAT agent." Ten minutes later Mr. X calls up and can give HMRC the client's name, the name of the business, the date of birth, the postcode. How hard can it be to give the accountant the Box 5 number or the last month of submitted VAT return?

I have a client who HMRC thinks owes them over £30k in VAT, threatening to wind up what is a perfectly solvent business which has short term cash flow trouble due to an insurance company slow paying a flood payout. In reality the client owes just over £10k. Somehow the client does not know all 5 items, or potentially - it happens at least 5% of the time - the database simply has wrong data in it such as a keying error.

I see no excuse in continuing to jobsworth this one, hence will raise a formal Complaint Case this week if it carries on. Complaints are the one thing dealt with professionally at HMRC.

JasonLVC

chrismac1 wrote: »

You've been lucky. I've had the car dealer take 4 months then get accused of late filing, and a pub client take over 6 weeks. On self-assessment it seems routine to take at least 6 weeks just to issue the number. Not to mention the interminable problems getting approved as an agent on VAT - with 5 pieces of data to complete, for many clients this is a bridge too far. Even when you get a client to call up the online folk and give them permission to talk to you they sometimes still jobsworth you when you call up.

A 64-8 form covers all the taxes, every new client should sign one when they sign their engagement letter with you and send the 64-8 to HMRC and so should be no need to have to get client to pre-authorise you as the agent so you can make the call.

I do agree that the security measures can be a little extreme though. You may not have experienced yet a client who has forgotton both their username and password! Its easier to hack into a celebrities phone than get a password reset done over the phone.

chrismac1

Granny sucks eggs. How are you going to get a 64-8 sorted when the client doesn't know half the boxes on the form to tick?

JasonLVC

chrismac1 wrote: »

The client calls up and says "I give you permission to speak to Mr X of X Accountancy, who is my accountant and I want to be my VAT agent." Ten minutes later Mr. X calls up and can give HMRC the client's name, the name of the business, the date of birth, the postcode. How hard can it be to give the accountant the Box 5 number or the last month of submitted VAT return?

I have a client who HMRC thinks owes them over £30k in VAT, threatening to wind up what is a perfectly solvent business which has short term cash flow trouble due to an insurance company slow paying a flood payout. In reality the client owes just over £10k. Somehow the client does not know all 5 items, or potentially - it happens at least 5% of the time - the database simply has wrong data in it such as a keying error.

I see no excuse in continuing to jobsworth this one, hence will raise a formal Complaint Case this week if it carries on. Complaints are the one thing dealt with professionally at HMRC.

In fairness, if the client doesn't even know their own Box 5 number from last period, it should set alarm bells ringing about the clients compliance.

As for other client, HMRC will only assume it is owed £30k probably becuase client hasn't submitted their VAT return (which generates a surcharge notice and estimated liability). Is that the case? Client not submitted VAT return becuase they're waiting for payment?

If client has an exceptional delay on a major payment, contact the Time To Pay Unit and tell them this and they will grant 6 months for payment to be made, but that is assuming they've submitted a return but not the payment.