Bad Debts / Not VAT Registered

pvincent

Hi,

Basically I have been doing some freelance work (infrequently and not for very large amounts) and generally it has been going well but I have an overdue invoice and it doesn't look like they will pay.

I was thinking of going to small claims court or pointing out that I would pursue the debt but am not sure if I can? Part of me thinks that to be able to recover a debt you must be VAT registered?

But I couldn't find any info on this so would be grateful if someone could enlighten me, and quite quickly because I want to chase them about the invoice today.

Jarndyce

No you do not need to be Vat registered. You can't have looked very far for info - try here for starters:

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/ManagingDebt/Makingacourtclaimformoney/index.htm

pvincent

I meant I couldn't find anywhere that explicitly stated that you do not have to be VAT registered to make a claim. I could find info on making a claim etc but nothing that referred to VAT registration status.

I will send them a reminder today and if nothing happens I'll make a claim. Thanks for the info.

Jarndyce

Ah right, sorry. No - any two parties can end up in a small claims court - doesn't even have to be business/emlpoyment related.

Uncertain

I think the OP was mixing two completely different things together in his mind.

There are special provisions within the VAT regulations for how you account for bad debts but that is not relevant here.

As Jarndyce says, any individual or business can take any other individual or business to court.

Well, you can't sue the Queen but she is the one and only person in the country that is immune!

Notmyrealname

You need to do the following first:

(All sent by recorded delivery)

1) Send a reminder with a statement of accounts showing outstanding amount and stating it is due within, say, 14 days
2) After 14 days you need to send a "Notice of Intent" which is a letter basically stating that the amount is now well overdue and that if it isn't paid within 7 days that you will instigate county court proceedings. Make sure you say that a cheque is not acceptable as payment.
3) If they still don't pay then go online and put in a claim.

DVardysShadow

Notmyrealname wrote: »

You need to do the following first:

(All sent by recorded delivery)

1) Send a reminder with a statement of accounts showing outstanding amount and stating it is due within, say, 14 days
2) After 14 days you need to send a "Notice of Intent" which is a letter basically stating that the amount is now well overdue and that if it isn't paid within 7 days that you will instigate county court proceedings. Make sure you say that a cheque is not acceptable as payment.
3) If they still don't pay then go online and put in a claim.

Notice of intent also known as Letter Before Action

pvincent

Thanks people. Well they said they would pay me by BACS tomorrow so that means I will have it in my account next week? I thought BACS was instant for some reason but haven't made/received one in ages.

The only other issue is over the security of BACS. I mean I have to give someone else my sort code and account number...could they not then access my account (in branch)? Or am I just being paranoid.

paddedjohn

you are being paranoid, have you ever paid by cheque? all these details are on the front of cheques.

MX5huggy

You should put your account details on all invoices, then people can pay you.

pvincent

Thanks. I mean couldn't someone just walk into a bank impersonating me? I watch too many 'true crime' programmes...