my accountant has just stated i turned over £73k my norm t/o is £53k approx do i now have to reg 4 VAT?
i have a new accountant and they have just done my books for the 1st time and stated i turned over £73k which i am suspect of as i normally do around £50k and it wasnt particularly busy for me in 06-07 . Also i had to chase them for my accounts right up til 2 days before the deadline for filing and they havent even mentioned the vat problem yet . My problem is , is that if i go vat registered it will make me price myself out of the game when its hard enough at present to get the work as it is with all the foreign cheap labour undercutting everyone
United Kingdom - 5 Answers
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Answer 1 :
Yes, starting from the month you went over the threshold! VAT threshold is 64k so the first month you earned more than £5333 is hypothetically when you should start paying. Good news is you can claim back for upto 3 years on anything you still have on stock!
Answer 2 :
Double check the figures on which your new accountants have based your turnover if you're in doubt. It's not a big job just to look a list of invoices for the year - they should be able to let you have this without difficulty. I think you have two choices: 1. register for VAT (and remember your customers can reclaim VAT if they are themselves registered for VAT). Given your turnover, you're eligible to register for something called flat rate VAT (makes keeping records very simple indeed and can be to your advantage - see HMRC website for more info: http://www.hmrc.gov.uk/manuals/bimmanual/bim31585.htm or ask your accountants) or 2. keep a handle on your own turnover and make sure you stay just below the VAT registration threshold each year, which is presumably a better option than pricing yourself out of the market. Speak to the Revenue (who are much more pragmatic these days) about your temporary journey over the VAT threshold and you may find you don't need to go through the process of registering and deregistering... Good luck!
Answer 3 :
Have you introduced any money into your business? they may have mistreated this as sales not capital introduced. I would double check their workings they may have counted things twice in error but if your records are good I can't see how.
Answer 4 :
If they've just done your books, I assume for the tax year 2006/07, then your year ended before 05/04/07 so it's ten months since you should have registered. This could be very expensive as you are liable to pay VAT on your turnover since you should have registered. Guessing at £75k turnover means you owe £11000 in VAT, which you probably can't charge to your customers.(Less input tax) Ask them to check your turnover again for Capital Introduced, Motor Vehicle sales, or other items which aren't sales.
Answer 5 :
If this a one off spike in turnover you can ask customs to be relieved from registering as your turnover will decline in future
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