Plus VAT or not plus VAT?

[Ltd]

I recently have been approached by an agent with a contract paying of £600 a day. The interview went well, my limited company signed the contract and one month is done. The agency generated a bill out of my time sheets, 20 days, £600 each, £12000 in total. But is it supposed to be £12k+VAT? OK, I am still in the process of VAT registration but as https://www.gov.uk/vat-registration/overview says,

You can’t charge or show VAT on your invoices until you get your VAT number. However, you’ll still have to pay the VAT to HMRC for this period.

You should increase your prices to allow for this and tell your customers why. Once you’ve got your VAT number you can then reissue the invoices showing the VAT.

Is it reasonable to expect that client pays VAT on top of agreed rate? If not, how on earth most of you here take home 85% while VAT is 14.5% or 20%?
I work in IT if things are different accross inductries.

[SueEllen]

If you aren't registered for VAT you cannot claim it.

Once you are registered then issue all your invoices with VAT added.

[stek]

I call sockie, no one is this thick.

[AMH]

whatever the client does to raise revenue, they charge vat on.
anything they spend, they pay vat on (well, vatable things)
so they pay vat to you.
If they raised £10k vat from revenue
and paid you 1k vat
then they owe the queen 9k & you 1k

your agency will bill your client for VAT as they would be vat registered.
you bill your agency. so they pay the vat to you.

[TheCyclingProgrammer]

If your VAT registration is pending and you expect your registration date to pre-date any invoices you send, then you have a few options. Bear in mind that you cannot charge VAT or issue a VAT invoice until your VAT registration is complete and you have your VAT registration number.

1. Issue an invoice with a gross amount equal to the VAT inclusive amount, so £14400 in this case. Inform your clients why you are doing this and tell them that when your registration is through, you will issue a credit note for that invoice and issue them a new VAT invoice of £12k + VAT.

2. Issue an invoice for £12k now, then when you registration is complete do as above or simply issue a VAT only invoice.

[Pondlife]

whatever the client does to raise revenue, they charge vat on.
anything they spend, they pay vat on (well, vatable things)
so they pay vat to you.
If they raised £10k vat from revenue
and paid you 1k vat
then they owe the queen 9k & you 1k

your agency will bill your client for VAT as they would be vat registered.
you bill your agency. so they pay the vat to you.

Does this make any sense to anyone?

[jamesbrown]

Does this make any sense to anyone?

Yes, Ltd is AMH's sockie.

[tractor]

...

whatever the client does to raise revenue, they charge vat on.
anything they spend, they pay vat on (well, vatable things)
so they pay vat to you.
If they raised £10k vat from revenue
and paid you 1k vat
then they owe the queen 9k & you 1k

your agency will bill your client for VAT as they would be vat registered.
you bill your agency. so they pay the vat to you.

You sound like an excellent accountant. Are you taking new customers?

[mudskipper]

If your VAT registration is pending and you expect your registration date to pre-date any invoices you send, then you have a few options. Bear in mind that you cannot charge VAT or issue a VAT invoice until your VAT registration is complete and you have your VAT registration number.

1. Issue an invoice with a gross amount equal to the VAT inclusive amount, so £14400 in this case. Inform your clients why you are doing this and tell them that when your registration is through, you will issue a credit note for that invoice and issue them a new VAT invoice of £12k + VAT.

2. Issue an invoice for £12k now, then when you registration is complete do as above or simply issue a VAT only invoice.

Or 3. (the simplest if your cashflow allows it) Hold off issuing the invoice until you've got your VAT registration.

[SueEllen]

I call sockie, no one is this thick.

Actually people are.