WWYD Invoice one

[Tantrumschmantrum]

I'm new to freelancing and have made a bit of a blunder. I did some work for a public business and I invoiced them thinking I needed to add VAT.

They emailed me to say how much they were going to pay me and it didn't include VAT. I showed it to my business savvy friend who said they were right as I'm not VAT registered and they'd probably worked that out on my behalf. I emailed them back to say Thanks and all good. Then I got another email saying they were going to pay me the amount including VAT. Should I fess up and pay back the extra? Its not much, but don't want to get into trouble Help

If they are a VAT registered business & they try to reclaim the VAT then this will probably get picked up by their accountant or HMRC.

What made you think you could add VAT in the first place?

Be honest - if your not VAT registered then you cannot add the VAT onto an invoice for payment. You can actually get into a bit of bother with the tax man if you do try this so don’t even bother!!!!

Just email them and tell them.
‘Apologies, due to an admin error this has been incorrectly charged to include VAT. Amended invoice attached.’

Alexander it wasn't done intentionally, just a novice at it. When we get work in from similar companies they always stick VAT on them so assumed wrongly it was the norm. I need to do a business course for dummies!

Hmrc do some great webinars in issues like this, I'd highly recommend them. Definitely pay back the VAT/ reissue invoice to clarify, it isn't as simple as being a bit overpaid as other posters have explained, they will claim it back and the paper trail won't add up.

Well done you for being so honest. I'd probably fess up.

Well done on the first job btw

Sam

Thanks thisartist!

So I fessed up. They were really nice about it and said all would be fine if I paid back the VAT. Only now wondering if I should ask them for some sort of acknowledgement of the payback so I have evidence if the taxman should come calling? What would you ask for?

@Tantrumschmantrum

Get yourself online and educate yourself about your taxes. Do you know how to record tour expenses (and what counts as an expense). You can't just start a business and learn as you go because you can get into bother with these things.

Just write up a confirmation of refund and add it to your files along with the corresponding bank statement showing the refund. That should cover you.