Paying a Ltd Company that you know isn't paying it's Tax.

Funky_Bold_Ribena

AdminQueen wrote: »

Hi there,

We have recently discovered one of our suppliers isn't actually paying it's taxes. Not through some legal loophole - they just aren't paying.

As a Ltd company ourselves we ensure everything we do is 100% above board and are now reluctant to deal with this supplier.

The trouble is we owe this supplier some money and don't want to pay it until we know they are compliant. If we did go ahead and pay it, knowing they wouldn't be paying any tax, could we get into trouble?

Thanks for any advise,
AdminQueen.

Pay them what you owe then stop using them as your supplier.

earthstorm

CKhalvashi wrote: »

I really don't care if those I'm dealing with (provided they are VAT registered) aren't

so you will only deal with a business if they are VAT registered.

You do know their is no legal requirement for every business to be VAT registered unless you reach the required threshold

http://www.hmrc.gov.uk/vat/start/register/when-to-register.htm

(If your turnover of VAT taxable goods and services supplied within the UK for the previous 12 months is more than the current registration threshold of £79,000)

Funky_Bold_Ribena

earthstorm wrote: »

so you will only deal with a business if they are VAT registered.

You do know their is no legal requirement for every business to be VAT registered unless you reach the required threshold

http://www.hmrc.gov.uk/vat/start/register/when-to-register.htm

(If your turnover of VAT taxable goods and services supplied within the UK for the previous 12 months is more than the current registration threshold of £79,000)

Some businesses are not VAT-able anyway. For example education and training. So we aren't because they won't allow us to.

Thrugelmir

AdminQueen wrote: »

The trouble is we owe this supplier some money and don't want to pay it until we know they are compliant. If we did go ahead and pay it, knowing they wouldn't be paying any tax, could we get into trouble?

Then it's your own Company profile you may be hurting. As late payment will be scored against you.

SuperHan

earthstorm wrote: »

so you will only deal with a business if they are VAT registered.

You do know their is no legal requirement for every business to be VAT registered unless you reach the required threshold

http://www.hmrc.gov.uk/vat/start/register/when-to-register.htm

(If your turnover of VAT taxable goods and services supplied within the UK for the previous 12 months is more than the current registration threshold of £79,000)

But of course you should care whether the businesses you deal with are VAT registered... It impacts whether you pay VAT and whether you can claim it back...