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VAT
4. Charging Customers VAT
A business will be liable to pay VAT on all supplies it makes from the date it is required to register rather than when registration is complete.
4.1 As soon as VAT registration is required (see 3.1), an application should be made to HMRC to start the process.
Forms can be downloaded from www.hmrc.gov.uk/vat.
4.2 While the application is processed, your pricing should reflect the VAT liability less any input tax that can be reclaimed.
- Show only the gross amount - VAT cannot be invoiced as a separate item until a VAT number is allocated. Tell customers that proper VAT invoices will be issued (see 5) once you are registered.
- If a business decides to hold its prices to avoid losing customers, it will still have to pay VAT to HMRC calculated by treating the sales value as including VAT (ie paying HMRC one-sixth of the price charged).
Labels: Tax
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