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bigduckontax, Accountant
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I have registered a limited companie but not VAT registered

Customer Question

Hello I have registered a limited companie but not VAT registered one. My clinet from Greece to whose companie I issued the invoice claims now that he ca not accept it with out my VAT number and make VIES declaration, as he claims that everyone can maje themslef an A4 that looks like invoice.
How can I explain to him that it legal for me to issue an invoice without being registere as VAT payer in UK.
Thank you in advacne,
Katarzyna Roslonska
Submitted: 11 months ago.
Category: Tax
Expert:  bigduckontax replied 11 months ago.
Hello Katarzyna, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. This is an old chestnut which comes up from time to time with other EU countries. Some of these, unlike the UK, have no VAT threshold and just an one euro invoice will trigger a requirement to register and charge the tax. Of course, in the UK we have a 83K threshold and many concerns operate, like your company, quite happily under this and do not have to account for VAT at all. When I run the accounts for a company in this position I arranged for all invoices to include a note to the effect that the organisation was not registered for VAT. Your only solution is to explain the position to him. You could draw his attention to paragraph 3 of the Gov UK's advice on the matter which you can find here: https://www.gov.uk/vat-registration/when-to-register The salient extract is: 'You must register for VAT if:your VAT taxable turnover is more than £83,000 (the ‘threshold’) in a 12 month periodyou receive goods in the UK from the EU worth more than £83,000you expect to go over the threshold in a single 30 day periodThere’s no threshold if neither you nor your business is based in the UK. You must register as soon as you supply any goods and services to the UK (or if you expect to in the next 30 days).' He is quite correct that organisations could spoof invoices, but so what. Your organisation does not and you should tell him to that effect. I do hope that I have shown you a way forward with your query.
Customer: replied 11 months ago.
Dear *****,
Thank you very much for your fast answer. I have explained already to him that I do not need to register for VAT number due to the reasons that you gave in your email. But still he claims, or it rather seems that he does not know how to declare this cost to his tax department, claiming that he has to do his VAT declarations. I am getting dizzy with his emails, and also he is the first one from my customers to claim to have problems.
Is there any EU legislation or a paragraph that can be quoted to him as an explanation?Kind regards,
Katarzyna
Expert:  bigduckontax replied 11 months ago.
In his VAT declarations he merely claims no input tax in his returns. No input tax has been charged so there is none to recover. Paragraph 5 might help to explain why your firm is not registered: 'VAT taxable turnover is the total value of everything you sell that isn’t exempt from VAT.You must register for VAT with HM Revenue and Customs (HMRC) if it goes over the current registration threshold in a rolling 12-month period. This isn’t a fixed period like the tax year or the calendar year - it could be any period, eg the start of June to the end of May.' This is a periniel problem and you will just have to keep hammering away at him until he understands. You could use this advice from th Tax Guide to Students from the Low Incomes Tax Reform Group: 'Are all sales liable to VAT?No, they are not. Some traders are not registered for VAT because their businesses are small – and some business activities do not attract VAT.' Please be so kind as to rate me before you leave the Just Answer site.
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Category: Tax
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Experience: FCCA FCMA CGMA ACIS
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Expert:  bigduckontax replied 11 months ago.
Thank you for your support.
Customer: replied 11 months ago.
Thank you for you help.
Hope he will understand.Kind regards,
Katarzyna
Expert:  bigduckontax replied 11 months ago.
Delighted to have been of assistance.

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