I was forwarded an email from a client's supplier - just one line, not written clearly, and seemed to be chasing for payment of an old invoice; a copy was attached. It was from two years ago - so I had to go back to my backups from that period to check. It turned out the invoice had been received, and I'd paid it on time - but it didn't show any VAT. The copy attached to the email did; that's what he was chasing.
So I replied pointing out there was no VAT showing on the original, and that we'd be happy to pay the VAT element, but given that it was two years ago, I'd need to see evidence that he was registered back then. After an initial misunderstanding of what I wanted, he's now supplied a copy of his registration cert.
It shows the (effective) date of registration as late July 2018. His invoice (and the job he did for my client) were two weeks earlier than that.
My first instinct is to reply and say "no"; that his registration began two weeks after he invoiced my client, so there shouldn't be any VAT due - and I have done. However, as an afterthought... it's worth a double check in case there's some rule I'm not aware of that allows him to charge VAT on invoices going back earlier. (Applying from the month, for example, rather than the specific date).
(TBH, I suspect what's actually happened is that he's done his VAT on a cash basis from the date of registration moving forwards - his invoice was paid in August, so I'm guessing that he's declared VAT on the payment. So I might have to educate a client's one-off subby from two years ago about how this works and how to put it right... FFS!)
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Vince M Hudd - Soft Rock Software
(I only came here looking for fellow apiarists...)
I can't think of a way round it off hand Vince, but in no way is my VAT knowledge in depth. Hopefully Joanne or Les will see this and give a more definitive answer.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
As far as I am aware you only start to charge VAT from the EDR, is it definitely this that is late July and the not the Certificate date as this is usually different, you can apply to HMRC to have the EDR changed if a mistake was made on the application (or you used to be able to) but I think this needed to be done before first VAT return submission, maybe this happened and they sent you a copy of the old certificate?
Your reasoning seems to make sense about using the cash basis, so if this is the case and below the 10K threshold can they not just adjust their next VAT return to show the mistake?
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Doug
These are only my opinions of how I see things and therefore should not be taken as advice
As it happens, it appears I needn't have worried about the possibility of there being a loophole that legitimised the guy's claim. After I said "no" I expected an argument from him - but despite his previous replies to me being very quick, it's now been a week and he hasn't responded to that.
Although my first thought was that he may have cocked up handling his VAT on a cash basis, and therefore declared VAT on the payment from my client (and that's still a possibility), I'm also half thinking he might have simply been trying it on. (And if it's that, I wonder how many other companies he did work for around the same time - and how many he's tried a similar thing with, and how many have just paid up.)
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Vince M Hudd - Soft Rock Software
(I only came here looking for fellow apiarists...)
