Consultancy and VAT

[10 Pence Short]

I've just begun doing some self employed telesales consultancy work for a local small business. I'm going to be invoicing him on a self employed basis. I won't be VAT registered.

I'm just wondering what the VAT situation will be? Do I have to add VAT to my invoices?

[smartie]

No, you mustn't unless you are registered.

[Eric Mc]

You only HAVE to register if your sales turnover exceeds £67,000 per annum.

[ginettag27]

Eric Mc said:

You only HAVE to register if your sales turnover exceeds £67,000 per annum.

ahem, that's per 12 month rolling period..

[Eric Mc]

12 month = a year (last time I looked) .

But you are right - the 12 month period you look at is the 12 month period just finished - so you need to monitor the situation continually.

Indeed, if you know you are GOING to pass the threshold within the next 12 months, they expect you to register as soon as you realise this.

[ginettag27]

Indeed but per annum would indicate to most that it's per calendar year or possibly tax year, whereas a rolling 12 month period is a different beast altogether...

[Eric Mc]

Unfortunately, I cannot predict how the PH readership will read my posts. If they chose to interpret "per annum" as a January to December calender year, I cannot anticipate that.

In the general accounting and tax world, the word "year" can mean many different things and therefore we often use the term "per annum" to mean any 12 month period.

Regarding the OP, I would be more inclined to ensure that your "Self Employed" status is correct rather than worrying about VAT issues.

[10 Pence Short]

Eric Mc said:

Unfortunately, I cannot predict how the PH readership will read my posts. If they chose to interpret "per annum" as a January to December calender year, I cannot anticipate that.

In the general accounting and tax world, the word "year" can mean many different things and therefore we often use the term "per annum" to mean any 12 month period.

Regarding the OP, I would be more inclined to ensure that your "Self Employed" status is correct rather than worrying about VAT issues.

Thanks for the help.

I'm aware of the registering for VAT status in terms of the limits, I just wasn't sure about the invoicing situation. I've invoiced today without VAT.

I have a regular job as an employee where I pay tax via PAYE.

This is separate work I am doing outside of my employed job. I am invoicing the client directly.

As to whether I am self employed or not, it's probably borderline. I choose when I do and don't work , I provide both my own equipment and use my clients (office based) and although I have only one client at present, I intend to expand this further in the future.

[Eric Mc]

That sounds fine. Obviously, if you actually CAN find additional clients, even better.

[VladD]

Lots of good advice here.

PCG