What is involved in becoming vat registered in the UK? any advice?
I'm a self employed web developer working in London, UK. Currently I'm not VAT registered but am approaching the current VAT threshold. I'm wondering if anyone knows what is involved in becoming VAT registered? and if they have any advice?
Basically my current contract wasn't supposed to last as long as it has (originally only supposed to be 2 months), and has now been rolling for close to a year - 11 months so far. The problem obviously is that I can't really just turn around to my client and ask for a 20% extra rise in what I'm being paid... So my other choice is to absorb the VAT myself, but is this even allowed?
I've been reading up online as much as I can but nothing I've found really gives me a hand with the actual reality of suddenly switching from one state to another... I'm amazed that more tax information sites don't deal in examples!
Having always dealt with my own tax return I don't have many resources when it comes to financial information so any advice would be much appreciated. Even if it's to recommend a reliable london-based accountancy firm that deals with web professionals.
Thanks.
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If you have been dealing with you tax returns till now, registering for VAT wouldn't make it any more different. Registering for VAT is simple, you fill up a form with the details and you would get your VAT registration form along with your VAT number in a week or so. Chances are you would be paying under the Flat Rate Scheme.
You would need to file your VAT returns quarterly or yearly maybe. HMRC would mail you to remind you of an impending VAT filing you need to do. If you want to go for an accountant, which doesn't seems so from your case, there are loads of them. But ask for proper advice and reviews before you join one. Most of them charge quite heavily, even though knowing that your books wouldn't be that complicated compared to real companies.
Regarding charging for VAT, you cannot file VAT returns if you aren't charging VAT, your invoices would be missing VAT charged. You would have a lot of explaining to do to the taxman. Actually your client mayn't be that wary of paying VAT if you ask them to, because it would make them go against the law and I don't think they would allow it.
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