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bigduckontax, Accountant
Category: Tax
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Hello I run a limited company that undertakes child protection

Customer Question

Hello I run a limited company that undertakes child protection investigations and assessments on behalf of local authorities and the Legal Aid Agency. Do we need to register for VAT and charge VAT on our fees? Part of our work is assessing children in the community and other is assessment and training of parents in our residential centres.
Submitted: 3 years ago.
Category: Tax
Expert:  bigduckontax replied 3 years ago.
Hello, I'm Keith and happy to help you with your question.
Your supplies would appear to be standard rated. Thus if your annual turnover approaches or exceeds 81K in any year then you must register and charge VAT on your supplies. Here is HMRC advice on the subject:
'You must register for VAT if:
Your VAT taxable turnover is more than £81,000 (the ‘threshold’) in a 12 month period
You receive goods in the UK from the EU worth more than £81,000
You expect to go over the threshold in a single 30 day period
There’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).'
I do hope I have shown your position viz a viz VAT registration.
Customer: replied 3 years ago.

Thank you, ***** ***** not registered and may have been in this position some while, our accountants advice apparently after seeking clarification from Custom and Excise was that we were an exempt service given what we did and who we provided the services to. I have always been nervous at this position. Does the fact that we supply only government agencies make any difference?

if we do have to register are they likely to go back in time?

Expert:  bigduckontax replied 3 years ago.

No, the fact you supply the Government is irrelevant.

I did look for you to see if your services were exempt, but could find no indication that they were. Education and training usually are, but if you trawl through you will find organisations offering training in subjects similar to yours at a price plus VAT. However, if you discover that some of your outputs are exempt please remember that the annual turnover rule of 81K applies only to standard, reduced and zero rates supplies; exempt outputs do not come into the registration equation at all. I would be inclined to run the question across your local HMRC office.

Here is the HMRC advice on late registration:

'Late registration If you register late, you’ll still need to pay all the VAT due from the time you should have registered. HM Revenue and Customs (HMRC) may also charge you a penalty, depending on how much you owe and how late your registration was.'

Always bear in mind Benjamin Franklin's dictum that in life there are but two certainties, death and taxes!

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Customer: replied 3 years ago.

We are registered with Ofsted so I think that means we come under a welfare organisation, it specifically mentions child protection. We are therefore a government regulated body. I am hoping that makes a difference.

Expert:  bigduckontax replied 3 years ago.
It does not, but if you offer speech therapy training and are statutorily registered as speech therapists then your outputs are exempt.