Unpaid VAT invoice - advice please

[monkeygeorge]

I sent a retrospective VAT only invoice to my former agency. After four months of chasing they have not paid up.

Is it possible they would dispute the invoice given that I was not VAT registered at the time of employment, or are they just being too lazy to send the bill to the end client? It is after all the client that has to bear the cost, or would the agency have charged the client VAT regardless of whether I was VAT registered myself?

I've already paid the VAT to HMRC so I don't want to write it off.

Anyone had a similar experience and can perhaps recommend a solicitor? Debt recovery solicitors won't deal with VAT only cases.

[Alan @ BroomeAffinity]

If you marked the original invoice "VAT Number Pending" or something similar then they are more or less duty bound to pay the VAT to you on a retro invoice. It makes no odds to them as they wll be able to claim it back on their VAT return. Just treat it like any other debt and hit them with a 7-day letter.

Why have you paid it over to HMRC already? Surely for cash flow purposes you would be using the VAT cash accounting method.

[monkeygeorge]

If you marked the original invoice "VAT Number Pending" or something similar then they are more or less duty bound to pay the VAT to you on a retro invoice. It makes no odds to them as they wll be able to claim it back on their VAT return. Just treat it like any other debt and hit them with a 7-day letter.

Why have you paid it over to HMRC already? Surely for cash flow purposes you would be using the VAT cash accounting method.

Yes, the invoice was marked "VAT registration pending".

I asked my accountants about whether it would be HRMC's loss or mine and they said I would have to declare all the VAT due regardless of whether it has been paid. They completed all my VAT forms.

[Bluebird]

Did you have the VAT registration backdated?

If so you can either file against the company - do a search for bad payers theres a couple of links to websites.

You can also contact your VAT office and advise them of it - I doubt the agency will like HMRC sniffing around...

[malvolio]

Don't forget, the payment of retropsective VAT bills is not actually part of your contracted payment terms. You might just be stuck in their 90-day payment terms cycle.

Still chase them up though !

[monkeygeorge]

Did you have the VAT registration backdated?

If so you can either file against the company - do a search for bad payers theres a couple of links to websites.

You can also contact your VAT office and advise them of it - I doubt the agency will like HMRC sniffing around...

Yes, I had the VAT registration backdated.

I'll contact the VAT office if this goes on much longer, thanks.

Don't forget, the payment of retropsective VAT bills is not actually part of your contracted payment terms. You might just be stuck in their 90-day payment terms cycle.

Still chase them up though !

It would be good if the agency would actually respond to me and actually confirm they're not obliged to pay!

They kept saying they'll look into it and recently ignored me completely.

[Alan @ BroomeAffinity]

Yes, the invoice was marked "VAT registration pending".

I asked my accountants about whether it would be HRMC's loss or mine and they said I would have to declare all the VAT due regardless of whether it has been paid. They completed all my VAT forms.

With respect, your accountant is wrong. You categorically do not have to declare VAT on your VAT return until it is paid. I suggest you take this matter up with your accountant as a matter of urgency.

[blacjac]

Yes, I had the VAT registration backdated.

I'll contact the VAT office if this goes on much longer, thanks.


It would be good if the agency would actually respond to me and actually confirm they're not obliged to pay!

They kept saying they'll look into it and recently ignored me completely.

I think they will find they are obliged to pay, and if they refuse, it is to be reported to HMRC.

[monkeygeorge]

With respect, your accountant is wrong. You categorically do not have to declare VAT on your VAT return until it is paid. I suggest you take this matter up with your accountant as a matter of urgency.

I've already paid it, so it's too late now, isn't it?

I think they will find they are obliged to pay, and if they refuse, it is to be reported to HMRC.

Would the HRMC care if they already have their money?

[malvolio]

Would the HRMC care if they already have their money?

Yes. Someone is hanging on to money that doesn't belong to them.

First rule of business - never, ever, piss off the Vatman...