VAT kick in teeth for small firms

jimkelly

The customer does "pay vat on the stuff they buy", but it's the VAT registered business that collects it and then has to forward (pay) it to HMRC.

There are some businesses, farming being a good example, who are VAT registered but nearly always end up being refunded as they are buying more than they are selling.

calcotti

JCS1 said:

yellow1231231 said:

gettingtheresometime said:

Our accounting period is exactly the same & I've worked it out this week we are getting a £1,400 refund.

its not a refund you will still owe the money 

Depends - if your sales are mainly non vatable and your costs vatable, you do get a refund.

Or, if you are cash accounting, and the amount of VAT paid to you during the period is less than the amount of VAT you have paid out.

whizzywoo

jimkelly said:

There are some businesses, farming being a good example, who are VAT registered but nearly always end up being refunded as they are buying more than they are selling.

That's not necessarily correct for farming.  Farmers mainly get refunds because their sales are mostly zero rated but a lot of their expenses have VAT on them which accounts for a refund.  Not because they buy more than they sell.

Many businesses may well have VAT refunds to come for the quarter which included March, April and May because of little or no sales, therefore little or no output VAT.  But they may have had overheads and expenses which had VAT charged on them (input VAT) and therefore a refund results.

yellow1231231

gettingtheresometime said:

yellow1231231 said:

gettingtheresometime said:

Our accounting period is exactly the same & I've worked it out this week we are getting a £1,400 refund.

its not a refund you will still owe the money 

How do you work that out?

i perhaps should have added that we operate under the cash accounting system if that makes a difference 

i assumed you were talking about the deferral holiday as that what the op was talking about not the normal process of vat collection 

jfinnie

Gingerly said:

My accountant said it was the accounting period ...but it isn't.  I mean common sense would prevail  No not a chance.  IT IS THE PAYMENT DATE and that is after June 30th

Unbelievable.

Just sounds like you've had some bad advice from your accountant, you should be having words with them.  All the Govt information has been clear it was a deferment of payments due based on payment date.  So it sounds like you didn't defer the one payment you could have done.
Perhaps unlucky timing that your due date was very close to the start of the scheme, maybe your accountant wasn't very up on the detail.  No help to you now though.