VAT delinquent

Hi,

I have made a bit of a mess with my VAT and could do with some advice. Here is the story. I started a business and discovered that i did not need to pay vat until i had a turnover greater than a certain figure so I started by not charging or registering for VAT. Then when in certain months i began turning over close to ( or greater than ) the deciding figure ( divided by 12 for month ) I decided that I should now register for VAT so what I did was a) got the registration form from the revenue b) started up a savings account for VAT in my bank and c) started charging my customers VAT..... however to cut a long story short between the recession, being short of money and extremely busy I never ended up actually registering (and of course my savings account has a nil balance ! ) That has been almost a year ago and I realise that I must register immediately; however when I fill in the form should I just fill it in as if I had only started charging vat at this present time or should i make some mention of the last year, and if I do will they throw the book at me or land me with a huge bill to be paid back in a few days. Has anyone any experience of this or advice.

1) Did you actually exceed the registration threshold in the first 12 months? (€37,500 for services and €75,000 for sale of goods )

2) Are your customers mostly VAT registered or not ?

3) Did you supply invoices showing VAT charged on them but with obviously no VAT number?

1) I am actually in the process of working this out so I dont know yet - for some reason i thought that it worked on a month basis and if so then i have definitely overshot on certain months but ....
2 ) the majority would be vat registered
3 ) yes invoices showing vat but with no number

1) If you do not exceed the threshold in a continuous 12 month period then you would not have been obliged to register. However if you now see that average monthly sales are such that you would definitely exceed then you should register from now anyway regardless of any issue on the initial period.

2) & 3 ) You have supplied them with invoices charging VAT illegally. They are not entitled to VAT input on them and if they have claimed VAT on them and are audited by Revenue they wil be disallowed. Of course they should not have claimed VAT on them once no number on but many businesses overlook that innocently.

You could retrospectively register from the start, you would owe the VAT but your clients would be entitled to the VAT input credit. You would also be entitled then to claim VAT on your costs in the period. However you can only register back when over the threshold. i.e. If registering while under the threshold you can only do so from the current period.

If you should have registered and do not, when your accounts are filed with Income Tax that may result in a VAT registration enquiry.

You need to work out the position so far, see where you stand vis a vis the threshold. I also urge you to engage the services of an appropriately qualified person, accountant/bookkeeper to put this in order for you.

Thanks for your clear advice. It seems that if i have not exceeded the threshold for the year ( which I think i may not have ) then i could just register from "now" however i run the risk that one or more of my customers might be audited and that could be messy. But if i have read you properly then even if i wanted to "put this right" I might not be able to anyway unless i am over the threshold. Is there any way to make an educated guess as to the likelyhood of one of my clients being audited. There are about 10-15 in total that i have charged vat on, and the majority are small businesses. What bothers me is that many of them are personal friends and family ( i suppose I didnt realise quite how serious the situaltion was ) and also am i right in saying that a future audit could go back a large number of years.
With all this in mind i suppose i would rather opt for the "full confession" however i simply dont have the money - do you know of any options

officepres said:

With all this in mind i suppose i would rather opt for the "full confession" however i simply dont have the money - do you know of any options

Click to expand...

Many people have tax issues and no money to settle them. Unfortunately when it comes to Revenue that is not their problem. They might also take a dim view of someone charging VAT while not registered. They will take instalments on agreed laibilities but only once current taxes are kept up to date. As I said, first hand professional advice is the best way forward. I see from your other post on "accounts" that you do have an accountant. Talk with them about it. Get it sorted and go on from there clean.

thanks graham