VAT

4. Charging Customers VAT

Charge customers VAT as soon as you are required to register. Do not wait until registration is complete. You will probably have to pay VAT from the date you were liable to register.

4.1 Contact HM Revenue & Customs and start the registration process.

4.2 For the time being, add 17.5 per cent to your prices (or less, as you can offset the VAT you will save on purchases). Show only the gross amount - don't show VAT as a separate item on invoices. Explain to customers that you will send out VAT invoices (see 5) once you are registered.

• If you hold your prices to avoid losing customers, you will still have to pay VAT to HM Revenue & Customs on all your sales.