I'm scratching my head on something re a new client!
New Ltd Co, y/e Sep 16, catch up job as no bookkeeping done.
Client registers for VAT from 1st Oct (this date is shown on Vat cert), however I can see from just a quick scan of bank statements that this is approx 3 months late so there is 9 months of 1st year trading non-vat and once I've un-picked everything 3 months to y/e to calculate VAT that should have been paid over.
So, before I set them up on VT (I haven't been using VT for that long) how do you think it is best to do this, i.e. when to turn on VAT etc bearing in mind the shinanigans with HMRC that will ensue and calculating the correct figures? I think maybe to leave them not VAT reg'd for the 1st year and use journals and turn on VAT from 1st Oct onwards (their 2nd year of trading) or is there a better way?
I realise there's going to be penalties on PLR etc...just would like to get the right set-up on VT from the get go if poss!
Once you've unpicked all the transactions checked the date he goes over the threshold. If it's June he should register from 1st August, so only two months sales to be accounted for. Work out the VAT element on total sales (1) from whichever period he should have been registered, and also a manual calculation of all VAT purchases (you can dump to excel from VT then use a formula to calculate the VAT element) Then do the necessary journal.
(1) Remember the total sales will be VAT inclusive, so you need to work out what the VAT would have been to get to that figure. Apologies if you already know to do that.
It may also be worth claiming pre reg VAT on eligible goods or services still in business at the correct VAT start date.
I had a similar situation 3 years ago although client hadn't registered for VAT. A grovelling apology to HMRC with a plausible explanation meant client escaped any penalties, just had the outstanding VAT to pay.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
