VAT Invoice for Consultancy Work - Do I charge VAT?

marie-20

Hi guys,

I've been asked to supply a VAT invoice to my old employer as I have been working for them for 2 weeks as a consultant.

I am self employed and have my own small business however I am no where near the £73K VAT registration point so I haven't registered for VAT (only expecting to get to around £20K this year) so I am persuming that I don't need to charge for the VAT?

Also does anyone have a simple invoice template that I could use?

TIA!

Marie

Mistral001

If you are not registered for VAt then you cannot charge it.

Send in an ordinary invoice without VAt on it.

heathcote123

marie-20 wrote: »

Hi guys,

I've been asked to supply a VAT invoice to my old employer as I have been working for them for 2 weeks as a consultant.

I am self employed and have my own small business however I am no where near the £73K VAT registration point so I haven't registered for VAT (only expecting to get to around £20K this year) so I am persuming that I don't need to charge for the VAT?

Also does anyone have a simple invoice template that I could use?

TIA!

Marie

As above poster pointed, you can't do a vat invoice without being vat registered. If you did, the vatman wouldn't like you very much...

There really doenst need to be much specific on an invoice - the company it's addresses to, your company name & address, an invoice number, brief description of services supplied, cost, and maybe terms (30 days is pretty standard)

tripled

Presumably the company wants a VAT invoice so they can claim the VAT back. However, as you haven't charged them VAT, there is nothing for them to claim back Probably standard procedure for them to ask for one. A normal invoice should suffice.

martindow

If you are dealing with companies rather than individuals it may be worth registering even though you are not required to do so. VAT registered companies will not worry either way and you can set off the VAT element of your business expenses against the VAT you collect in your invoices.

property.advert

If your customers do not mind if you charge VAT (which they will not if they are all VAT registered themselves), then you can come out ahead by registering for flat rate VAT.

You charge 20% so your invoice for £100 becomes £120 but rather than you passing on £20 minus your input VAT to HMRC, you simply pass over a percentage of your sales, which I think is 14% (please check) for consultancy (check to see if you could qualify for a lower rate).

As 14% of £120 is £16.80 then you have "made" £3.20. If you turnover £100,000 then you make an extra £3,200. I think the limit for the scheme is around £175,000 per year.

Quick, simple, straightforward and profitable. Why not ?

JasonLVC

As the others have posted, you do not charge VAT unless you are registeed with HMRC for VAT. If your main customer(s) are other businesses then you might as well register for VAT voluntarily as the extra cost of the VAT is not a prob lem for msot businesses who can recover it and it will allow you to reclaim VAT on your overheads such as internet, phone, laptop, etc (or consider flat rate scheme for VAT which may be even more beneficial for you). However, if your business customers are not VAT registered (ie, nurseries, small start-ups, etc then VAT registration will make you expensive and so don;t register for VAT until you have to).

If you are working for your old employer, please make sure you protect yourself from an attack from HMRC who may consider you still to be an employee of your old employer and that this 'self employed' scenario is just a ruse so that the old employer can avoid paying over NI contributions on what would have been your old salary and you pay less tax on your earnings.

In other words, if your only customer is your old employer and you work 5 days a week for them and have no other clients, then just make sure you've got all the proper paperwork, contracts of service (with the customer who is your old employer) and that you have notified HMRC you are now self-employed or else HMRC will see through the self-employed status. As a self-employed consultant you can turn up when you like, how you like and should not be under the command or control of the customer/old employer....you don't need permissions to be off sick, have a holiday or leave early, etc.

See here (this is really important) :-http://www.contractorcalculator.co.uk/ir35_avoidance_outside_contracting_former_employer.aspx

Oh and good luck with your new venture for 2012.

marie-20

Thanks guys.

I've submitted an invoice without VAT as my main SE is sales on eBay & Amazon therefore becoming VAT registered before I need to isn't a route I want/need to go down - at present my expected turn-over for the year is £30K (over 9 months) and £50K for next year.

As for working for an old employer, they made me redundant in July and I'm only covering whilst someone is off sick so a max of 5 weeks in total.

Thanks again! :T