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VAT payment - how quickly does this have to be with HMRC?

(10 Posts)
NeatSoda Tue 30-Aug-11 11:19:54

I'm not registered for VAT so currently don't bill it. I've had a look at the guidance notes for HMRC but still can't find the answer. Basically, my question is this:

If I were to invoice someone with VAT today, how long would I have to get that money to HMRC? Does my own payment period to client make any difference?

So if I wanted to give someone a 90 day or longer payment period, is there a chance that I'd need to pay the VAT on the invoice before the invoice has been paid to me?

TIA for any enlightenment!

NeatSoda Tue 30-Aug-11 11:31:42


irisjohnson Tue 30-Aug-11 11:37:39

Once you register there are various different ways of operating VAT. One is cash accounting which means you pay the VAT to HMRC according to when you receive payment. So if you invoice in May but don't get paid until August then you wouldn't account for that VAT until the return for August is due.

highriggs Tue 30-Aug-11 11:39:07

I don't pay the VAT to HMRC before I have received it , but that is because I am on VAT cash accounting scheme so I don't pay until I am paid the VAT
On the HMRC site there is a good guide so you can decide which scheme suits you best

NeatSoda Tue 30-Aug-11 11:42:30

Thanks. I saw the thing about VAT deadlines and assumed it would be from when the invoice was generated as my solicitor had mentioned something in passing like 'as soon as you add VAT to an invoice you become liable for that VAT' and I was concerned. I don't want to be in a situation where someone doesn't pay me and yet I've generated another liability.

singinggirl Tue 30-Aug-11 11:47:59

We are VAT registered, since it works out tyo our advantage to reclaim VAT on imports. Your VAT period is three months long, and you have another month after that to file your VAT return. (Plus an extra week if you file online). Since we file online, this usually means in practice that I file the return for January to March around 7th May. HMRC then collect the VAT about a week later by Direct Debit, and the same timescale for when they owe us a refund.

NeatSoda Tue 30-Aug-11 13:21:53

Thanks sininggirl. Can I ask - does your due VAT get triggered by your invoice, or by being paid?

highriggs Tue 30-Aug-11 23:13:11

You can't issue a vat invoice until you are vat registered. When you register as a vateable person/business then you can decide which scheme you will be on which will determine how and when you pay Vat . You only have to register for Vat if your sales are over 73,000 for the last 12 months . However you may register for Vat if it is adventagous for you even if your sales are below that.
Give vat people are call as they are helpful .

mranchovy Wed 31-Aug-11 14:29:19

If you mainly bill people who cannot claim VAT, it is not worth you registering unless you have to.

If you do register, it may be worth you using the Flat Rate Scheme which you can't use with the Cash Accounting Scheme.

... so the answers to your questions are probably not going to help you find out what is going to be best for you to do. What do you sell and to whom do you sell it?

TalkinPeace2 Fri 02-Sep-11 20:36:17

my answer would be
talk to your accountant
and if you are VAT reg and do not have an accountant - talk to your shrink - you need one

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