Charging VAT?
Out of context: Reply #8
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- Horp0
If you do go over the threshold start charging vat immediately though. Its not optional and it comes into effect the very moment you go over, not the next financial year or a month afterwards or anything like that - straight away. The R&C will be taking their cut of your income even if you didn't add vat to your invoices. This happened to me in a year when I earned a stupidly large amount of money. I didn't realise I had to start charging VAT immediately after the threshold and I sailed way past it then got caned with a massive revenue bill.
Had to go cap in hand to all my clients and ask them to accept and pay additional VAT invoices. Managed to recoup 100% of the VAT, but any one of my clients - or all of them - could just have easily said "Didn't add the vat? tough shit... we're not paying it now" and I'd have been well and truly sunk.