Bookkeeper registering for VAT - The Book-keepers Forum (UK)

freedomresources · Member

Bookkeeper registering for VAT

Alison · Senior Member

Hi

Would say that there are not many advantages as registering for VAT if your turnover is below the threshold unless you have business premises you rent as working from home bookkeeping most bookkeepers don't have many purchases to claim VAT on.

I became VAT registered end of last year because started business with 3 other revunue streams as well as the bookkeeping and rented retail premises so VAT registered as we pay VAT element on our rent so can claim that back.

As a bookkeeper you can complete VAT returns for clients but the client must sign it.

You can complete and sign VAT return for your own business.

Alison

farmergiles · Veteran Member

For some strange, stupid reason, the Revenue won't let you represent a client for vat purposes unless you are vat registered yourself!!Never seen the sense in this.

freedomresources · Member

Many thanks for you replies.

That's been my problem: the revenue not allowing non-VAT registered businesses to complete VAT returns and as I'm new to the business I feel that clients may be more inclined to choose an agent that is able to take ALL the hassle from them, instead of preparing the information and them having to send the information away.

Are the only real disadvantages that we have to fill out our own returns??

Alison · Senior Member

HI

I would say if your turnover is not going to be near the limit for becoming VAT registered and you don't have business premises would say as self employed bookkeeper that you would not have that many expenses that you could claim the VAT back on.

Also if you are new to the business if you become VAT registered and you want to gain clients it may restrict you from those clients who are not VAT registered because they won't be able to claim the VAT back on it or alternatively you earn less because you have your hourly rate inclusive of VAT for non VAT registered clients so earning 15% less at the moment and increase in January to 17.5%.

I had to think very carefully whether I was to go VAT registered for my bookkeeping business as had some non VAT registered clients (luckily they have all stayed with me) but we just could not work things out as with business premises and 3 other revenue streams we looked into keeping me as a sole trader and have Limited Company seperately with me paying rent to the Limited Company for office space and the Limited Company paying me for working on the other side of the business but could not get around the lease restrictions etc.

Alison

freedomresources · Member

Hello, once again thanks for the reply.

I am currently working from my office at home and have been seriously considering registering for VAT and the main reason is so that I can work as an agent with HMRC.
I think the rule that they have is silly. Does anyone knoe the logic behind it?

Alison · Senior Member

I am not sure of the logic with that. I know you can register as an agent for self assessment forms.

With VAT if there is that rule in place could you not just do the VAT return then pass it on to your client to sign and send off with there payment or client complete online themselves. This is what a lot of bookkeepers do.

Alison

freedomresources · Member

I know, but I feel that some clients would just rather their bookkeeper do it for them, its less hassle for them that way.
That is what I am doing at the minute.
Thanks for your reply :)

BackOfficeGroup · Guru

The wording on the VAT return form is:

DECLARATION: You, or someone on your behalf, must sign below.

It doesn't state that the person has to be employed by the company nor actually be anything to do with the company, just that it is correct and true.

I have not come accross the rule about being VAT registered to sign, although it has never been an issue as all clients would sign the return themselves but can you point me in the direction where it states that, as by what it says on the return, it seems that woudl not apply....

Wella · Expert

I have just had a look on the HMRC website and this is a copy of what is required to do VAT returns On Line for clients

VAT Online for Agents Service

You can submit an online VAT Return for a client if:

you're registered for VAT
you've been appointed online by your client to act on their behalf
When you send in a return online on behalf of a client, your client remains legally responsible for the declaration and the payment of any VAT.

I presume both parts are required to be able to do on line VAT returns..........

.....Just dug a bit deeper and had a look at HMRC mock up registration page. VAT registration is definately a requirement

Bill

-- Edited by Wella on Friday 31st of July 2009 09:17:25 AM

-- Edited by Wella on Friday 31st of July 2009 09:25:14 AM

BackOfficeGroup · Guru

so is the requirement just for online payments? Still seems a bizarre requirement.

LizB · Veteran Member

I dont really see what the problem is here - I have a number of clients who wanted their returns submitted online. I am not VAT registered, so could not be an agent. However, the clients themselves can register with HMRC as wanting to do the VAT online. - They then give you the user and password in order to complete the return for them. As long as they have sent in a DD form, HMRC just take the money from the bank account about 10 days after the month end submission. I now do this for 4 of my clients. If you read the notes sent with the VAT Returns, paper returns are to be phased out soon, so this will have to be the way forward, unless they drop the rule that your have to be VAT registered to be an agent!

BackOfficeGroup · Guru

LizB

There is no problem and there will always be a solution to everything but its good to debate such issues and offers a learning curve to the ways in which HMRC operate.

Its the same with SA forms, the client registers and you complete them, job done. Means you don't have to register as an agent, and does not mean that you cannot complete the work.

Knowing all the rules and the way things work means you will have more knowledge and be able to present yourself in a more professional way, especially when a client asks you a question that you may not have known if it was not brought up on somewhere like this forum.

freedomresources · Member

Thank you all for the information that you provided.
I never thought about the client registering themselves and using the log on. I just presumed that I couldn't do this.
I am so glad I joined this forum,

Louise O'Hagan

TraceyAnn · Veteran Member

I think in the Autumn the revenue are changing the rules so that you do not have to be vat registered yourself in order to be an agent to complete vat returns online.