VAT registration - friend didnt do VAT registration - friend didnt do
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  1. #1

    Ddraig Goch


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    Default VAT registration - friend didnt do

    Honestly not me - Im umbrella these days....

    A friend of my Mrs runs a beauty salon/training centre. Didn't register for VAT. Not clever.

    Now the VAT people are onto her. Her fault completely for being so stupid of course.
    I've always registered for VAT straight away as I guess all of us do. I understand the rules are over £85K turnover in a rolling 12 month.

    Obviously the VAT people have sussed on she hasn't registered and hasn't been charging VAT. Her accountant sounds well dodgy and I think they've tried to get away with this. Obviously, people are more keen to pay for training courses if theres not a 20% VAT hike on top.

    Anyway, she says now that the VAT people are charging her VAT that she should have charged for the last few months but didn't. Is this right? I know she's likely to get fined as well but this seems a bad mistake to make if you've got to pay VAT when you didn't charge it.
    Rhyddid i lofnod psychocandy!!!!

  2. #2

    More time posting than coding


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    Quote Originally Posted by psychocandy View Post
    Anyway, she says now that the VAT people are charging her VAT that she should have charged for the last few months but didn't. Is this right? I know she's likely to get fined as well but this seems a bad mistake to make if you've got to pay VAT when you didn't charge it.
    She needs to speak to a (better) accountant, but the way the VAT man will see this is that any income she received after her 12-month revenue passed the £85K VAT threshold was inclusive of VAT.

    Those VAT amounts are now due to the taxman.

    This actually makes sense to me.
    Last edited by Paralytic; 17th October 2019 at 10:31.

  3. #3

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    Quote Originally Posted by psychocandy View Post
    Honestly not me - Im umbrella these days....

    A friend of my Mrs runs a beauty salon/training centre. Didn't register for VAT. Not clever.

    Now the VAT people are onto her. Her fault completely for being so stupid of course.
    I've always registered for VAT straight away as I guess all of us do. I understand the rules are over £85K turnover in a rolling 12 month.

    Obviously the VAT people have sussed on she hasn't registered and hasn't been charging VAT. Her accountant sounds well dodgy and I think they've tried to get away with this. Obviously, people are more keen to pay for training courses if theres not a 20% VAT hike on top.

    Anyway, she says now that the VAT people are charging her VAT that she should have charged for the last few months but didn't. Is this right? I know she's likely to get fined as well but this seems a bad mistake to make if you've got to pay VAT when you didn't charge it.
    We don't need convincing that you haven't reached the VAT threshold.
    Quote Originally Posted by Bean
    I admit that I'm a lazy lying cretin, but so what?
    25 June 2018

  4. #4

    Ddraig Goch


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    Quote Originally Posted by Old Greg View Post
    We don't need convincing that you haven't reached the VAT threshold.
    Those £5 "handies" add up though!
    Rhyddid i lofnod psychocandy!!!!

  5. #5

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    Quote Originally Posted by psychocandy View Post
    Honestly not me - Im umbrella these days....

    A friend of my Mrs runs a beauty salon/training centre. Didn't register for VAT. Not clever.

    Now the VAT people are onto her. Her fault completely for being so stupid of course.
    I've always registered for VAT straight away as I guess all of us do. I understand the rules are over £85K turnover in a rolling 12 month.

    Obviously the VAT people have sussed on she hasn't registered and hasn't been charging VAT. Her accountant sounds well dodgy and I think they've tried to get away with this. Obviously, people are more keen to pay for training courses if theres not a 20% VAT hike on top.

    Anyway, she says now that the VAT people are charging her VAT that she should have charged for the last few months but didn't. Is this right? I know she's likely to get fined as well but this seems a bad mistake to make if you've got to pay VAT when you didn't charge it.
    Yes - they will consider that what she charged included VAT, so will calculate the VAT element. It won't be a further 20% on top

    (e.g if she charged £100, it would be £83.33 + £16.67 VAT)

  6. #6

    Ddraig Goch


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    Quote Originally Posted by Paralytic View Post
    She needs to speak to a (better) accountant, but the way the VAT man will see this is that any income she received after her 12-month revenue passed the £85K VAT threshold was inclusive of VAT.

    Those VAT amounts are now due to the taxman.

    This actually makes sense to me.
    Yes accountant has let her down a bit. (Although it could be argued its the business owners responsibility).

    I fear she could now be ****ed to be honest. Zero chance of invoicing VAT to her customers now. Some are VAT registered apparently - so you could invoice them and its just a PITA for them. Private individuals or small business are just not going to pay up another 20% on top that they can't reclaim.

    Of course, being sceptical here, if you're businesses customers are mostly people who aren't VAT registered its better for you NOT to be forced to charge them 20% on top. (VAT registered business dont care though). Better to offer a service at, say £100 than £120 of course.

    I do wonder if her accountant knew this all along and was playing the odds that it wouldn't get picked up.

    Not sure how HMRC got onto it though to be honest? After all, they wouldn't know the businesses rolling 12 month turnover....
    Rhyddid i lofnod psychocandy!!!!

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    Quote Originally Posted by psychocandy View Post
    Those £5 "handies" add up though!
    Keyboard replacement with a happy finish.
    Quote Originally Posted by Bean
    I admit that I'm a lazy lying cretin, but so what?
    25 June 2018

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    Quote Originally Posted by psychocandy View Post
    Yes accountant has let her down a bit. (Although it could be argued its the business owners responsibility).

    I fear she could now be ****ed to be honest. Zero chance of invoicing VAT to her customers now. Some are VAT registered apparently - so you could invoice them and its just a PITA for them. Private individuals or small business are just not going to pay up another 20% on top that they can't reclaim.

    Of course, being sceptical here, if you're businesses customers are mostly people who aren't VAT registered its better for you NOT to be forced to charge them 20% on top. (VAT registered business dont care though). Better to offer a service at, say £100 than £120 of course.

    I do wonder if her accountant knew this all along and was playing the odds that it wouldn't get picked up.

    Not sure how HMRC got onto it though to be honest? After all, they wouldn't know the businesses rolling 12 month turnover....
    Has she been trading less than a year and so not filed any accounts? If so, then yes it's odd that HMRC have picked it up. If she has traded for longer and filed accounts then the values submitted will have triggered something somewhere that said "this warrants a bit of a look-see".

  9. #9

    Ddraig Goch


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    Quote Originally Posted by Old Greg View Post
    Keyboard replacement with a happy finish.
    If I replace mouse and keyboard the bonus is a blowie
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  10. #10

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    Quote Originally Posted by ladymuck View Post
    Has she been trading less than a year and so not filed any accounts? If so, then yes it's odd that HMRC have picked it up. If she has traded for longer and filed accounts then the values submitted will have triggered something somewhere that said "this warrants a bit of a look-see".
    Pretty sure its more than a year.....

    That wouldn't be clever. i.e. filing a return of more than £85K turnover then not registering for VAT.
    Or just hoping no-one wouldn't notice.
    Rhyddid i lofnod psychocandy!!!!

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