backdated VAT not being paid by employer
sann420
Posts: 122 Forumite
Hi All,
So about a year ago I worked as a contractor(under my own Ltd company) for a VAT registered employer for one month. Having always worked as a permanent employee, this was my first and only time working as a contractor and therefore did not know much about how these things work. At the time when I created my company my accountants applied for a VAT registration for it. The registration wasnt completed until my job with the said employer already finished. So at the time my invoice did not have any vat on it.
Now when filing the end of the year tax returns etc with HMRC my accountant says that I need to chase that employer for a backdated VAT payment as the govt considers one to be VAT registered from the time of application. So I did this and the employer told me straight up that they do not entertain backdated vat invoices.
So given the situation I will have to pay HMRC £800 in VAT payments from my own pocket. This is a lot of money for me and I wanted to ask if I have any rights in terms of claiming through a small claims court etc ?
Thank you in advance.
So about a year ago I worked as a contractor(under my own Ltd company) for a VAT registered employer for one month. Having always worked as a permanent employee, this was my first and only time working as a contractor and therefore did not know much about how these things work. At the time when I created my company my accountants applied for a VAT registration for it. The registration wasnt completed until my job with the said employer already finished. So at the time my invoice did not have any vat on it.
Now when filing the end of the year tax returns etc with HMRC my accountant says that I need to chase that employer for a backdated VAT payment as the govt considers one to be VAT registered from the time of application. So I did this and the employer told me straight up that they do not entertain backdated vat invoices.
So given the situation I will have to pay HMRC £800 in VAT payments from my own pocket. This is a lot of money for me and I wanted to ask if I have any rights in terms of claiming through a small claims court etc ?
Thank you in advance.
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Comments
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Hi All,
So about a year ago I worked as a contractor(under my own Ltd company) for a VAT registered employer for one month. Having always worked as a permanent employee, this was my first and only time working as a contractor and therefore did not know much about how these things work. At the time when I created my company my accountants applied for a VAT registration for it. The registration wasnt completed until my job with the said employer already finished. So at the time my invoice did not have any vat on it.
Now when filing the end of the year tax returns etc with HMRC my accountant says that I need to chase that employer for a backdated VAT payment as the govt considers one to be VAT registered from the time of application. So I did this and the employer told me straight up that they do not entertain backdated vat invoices.
So given the situation I will have to pay HMRC £800 in VAT payments from my own pocket. This is a lot of money for me and I wanted to ask if I have any rights in terms of claiming through a small claims court etc ?
Thank you in advance.
You don't appear to have been registered for VAT at the time, so you cannot lawfully charge VAT, nor are you responsible to pay VAT to HMRC relating to those supplied goods or services.
You need your VAT number on any VAT invoice, and you get that from the VAT registration certificate. The VAT registration certificate is generated and available to you online instantly your application to register is accepted.
If you were fully registered for VAT at the time, it would surely have been in the forefront of your mind at the time of invoice to apply VAT to that invoice, bearing in mind this was probably your one and only invoice for the single month you traded.0 -
You don't appear to have been registered for VAT at the time, so you cannot lawfully charge VAT, nor are you responsible to pay VAT to HMRC relating to those supplied goods or services.
You need your VAT number on any VAT invoice, and you get that from the VAT registration certificate. The VAT registration certificate is generated and available to you online instantly your application to register is accepted.
If you were fully registered for VAT at the time, it would surely have been in the forefront of your mind at the time of invoice to apply VAT to that invoice, bearing in mind this was probably your one and only invoice for the single month you traded.
Probably sent in the VAT application afterwards but put the registration date as of date of commencement, i.e. a few days/weeks earlier, hence being registered from a date before the application was submitted.
Shame the OP didn't include the standard wording of "VAT applied for" on their invoice and then they'd have a better right to send a revised invoice for the VAT at a later date.0 -
erm no, you have not appreciated what OP is sayingYou don't appear to have been registered for VAT at the time, so you cannot lawfully charge VAT, nor are you responsible to pay VAT to HMRC relating to those supplied goods or services.
You need your VAT number on any VAT invoice, and you get that from the VAT registration certificate. The VAT registration certificate is generated and available to you online instantly your application to register is accepted.
If you were fully registered for VAT at the time, it would surely have been in the forefront of your mind at the time of invoice to apply VAT to that invoice, bearing in mind this was probably your one and only invoice for the single month you traded.
OP has sent an invoice in the period between applying to be VAT registered and HMRC then making them VAT registered from an effective date. Clearly in this case the effective date is from before the invoice date, therefore VAT is due on the invoice, that is a statement of fact.
OP has not (understandably in the circumstances of their "temporary" foray into contracting) educated themselves adequately on how VAT works, which is a pity. However, what is truly reprehensible is that their accountants encouraged them to VAT register from the outset without then guiding them through the pitfalls. Why registration was undertaken from the outset is also a reasonable question given OP's stated reluctance to be a contractor and obvious intent to return to employment asap (unless of course we are talking about some big numbers, in which case OP's crying over merely £800 is hollow).
OP
- you have no legal basis on which to sue your client.
I will assume your contract with then named a "price", therefore they have fulfilled the contract by paying your invoice. The fact that after the event your price is now + VAT is your own lookout since the Govt guidance is very clear on what to do whilst waiting for VAT registration to come through - you inflate your prices by 20% and then, once the VAT no is received by you, you issue your client with a VAT only invoice for that amount so your client does not lose out and you have received the cash needed to pay your Vat.
to me it looks like the person you sue is your accountant for failing to explain the position to you.
Your client certainly has zero legal liability to you for VAT.0
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