VAT Threshold Question

FlappingAround

https://forums.moneysavingexpert.com/discussion/comment/82013229#Comment_82013229

I'm sure my son is doing exactly the same thing currently in his A Levels! Appreciate the reply though.

FlappingAround

https://forums.moneysavingexpert.com/discussion/comment/82013655#Comment_82013655

Good idea - I'll look round locally. This forum has been so helpful.

FlappingAround

https://forums.moneysavingexpert.com/discussion/comment/82013655#Comment_82013655

Good idea - I'll look around locally. This forum has been so helpful.

MyRealNameToo

You state you have a company and therefore you must be doing your normal accounting on an accrual basis as companies cannot do cash accounting for corporation tax etc.

Companies can do cash accounting for VAT if they are small enough however assessment for need to register for VAT has to be done on the standard method not cash.

So you could cancel/refund the unpaid invoice, this gives immediate VAT relief but reduces your turnover as a negative movement. Or after 6 months it could be written off as bad debt which will then give VAT relief but maintain the turnover.

Did you do the work/send the product? Obviously issuing a refund would extinguish any claim you have against the insolvent company.

May have more complexity if you have moved into a new company year

Altior

Registering is not ad hoc, the OP would need to issue VAT only invoices, ie on sales raised from any retro reg date.

These are all independent variables in my opinion, if reaching the VAT threshold then need to be registered. If registering in the cash basis, the bad customer would be irrelevant on net VAT for the transaction. The work has been done, so should be in the usual books to show correct gp and net profit (including costs and expenses), and the bad debt expense recorded as necessary.

Of course, if registering then you will be able to claim pre-registration expenses.

Very low costs does sound like services, and quite likely outside the scope anyway if the place of supply is outside of the UK.