Hello all,
I just have a quick question that I expect some lovely person might know the answer to:

I have hit the VAT threshold and so began the VAT registration process.

I just wanted to know where I stand? Do I have to pay the VAT on all sales after I hit the threshold or wait for the VAT registration to go through and then start paying the VAT?

Obviously this affects whether I should by from VAT registered sellers only, or non-VAT registered sellers are ok?

Many thanks in advance for any help.

regards
Jake

Whoops! You are meant to register before you hit the threshold. ie if you are doing 10K a month you should have applied at around month 8.

If I was you I would first speak to HMRC and explain the situation and then get an accountant to file your application and paperwork. They will advise the best options and tell you how to keep your paperwork 'straight'..

You can not charge VAT until the date issued on your certificate. However you can claim VAT back on your assets for up to 6 months previous (or along them lines, it's been a long time). However your Certificate maybe back dated so you may be charging VAT before your certificate is issued. Job for the accountant to advise again.

Once registered you buy from whatever supplier is cheapest. However as most suppliers will charge VAT you ignore this amount (although you pay it initially you claim it back via your quarterly return). So if VAT registered Joe bloggs sells you an item for £100 + VAT (£117.50) or another seller who is not VAT registered sells you the same item for £110. You are obviously better buying from Joe Bloggs.

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Last edited by greedyboy; 25-11-2008 at 04:37 PM.

But I hit the VAT threshold before my application to be Sole trade had even gone through (within a month of starting up.) I am waiting to be confirmed as Self Employed before I can even apply for VAt registration. Just wondered if there was a measure in place for this kind of scenario. Thanks for the advice

If that is the case, you really should have been VAT registered from day one.

Best speak to both HMRC and an accountant for the best possible outcome.

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Thanks, I will do just that. I didn't expect it to go this well you see. Cheers!

Despite the hassle, I'd like to congratulate you on reaching the threshold so soon! It took me three years.

Originally Posted by Martin

Despite the hassle, I'd like to congratulate you on reaching the threshold so soon! It took me three years.

Thanks for your kind words. I just graduated, so I'm very happy with the success

Yes congratulations there's a certain person on this forum will probably ask you what you are selling, you know the answer!!!!!

Originally Posted by nocturnal

Yes congratulations there's a certain person on this forum will probably ask you what you are selling, you know the answer!!!!!

Thanks for the congratulations. I don't really understand about the certain person though

For anyone interested, you get 2 months from when you cross the threshold to register.

EG if you cross anytime in November, then you start paying VAT from January.