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TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 16711
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I've just become vat registered and applied to join the flat

Customer Question

Hi,I've just become vat registered and applied to join the flat rate scheme,I'm a courier so sector says I charge 20% and pay hmrc 9%,my question is can I reclaim the vat that I have overpaid to hmrc at 20% since I started in this job?
Assistant: Have you talked to a tax professional about this?
Customer: Not really no
Assistant: Anything else you want the Accountant to know before I connect you?
Customer: That's all the information thanks
Submitted: 4 months ago.
Category: Tax
Expert:  TonyTax replied 4 months ago.

Hi. My name is*****'m looking at your question now and will post my answer or ask for more information here in a short while.

Expert:  TonyTax replied 4 months ago.

You are in the flat rate scheme not the standard scheme where you offset VAT you collect against VAT you pay. You can backdate the registration. However, it would be pointless to do that because you would need to go back to your customers and ask them to pay VAT on invoices you previously issued to them with no VAT and then pay over 9% to HMRC. None of your customers wold agree to that.

I hope this helps but let me know if you have any further questions.

Customer: replied 4 months ago.
I work for dpd so that is the only customer,obviously I have always paid 20% VAT to hmrc,so would it not be claiming back the 10% off hmrc that I have paid extra for my sector from when I started with them a year ago?
Expert:  TonyTax replied 4 months ago.

If you were not registered for VAT how were you paying 20% VAT to HMR? VAT on what exactly?

Expert:  TonyTax replied 4 months ago.

As you are now registered for the VAT flat rate scheme, you will charge 20% VAT to DPD. You will then pay 9% to HMRC and the balance you keep and pay tax income tax and national insurance contributions on if you are self-employed and corporation tax onif you operate your business through a limited company. You cannot reclaim VAT on your purchases since the 9% rate for your type of business takes account of the type of business purchases you make, eg fuel.

If you were VAT registered in the standard rate scheme, you would charge 20% VAT to DPD. You would deduct from that VAT you pay on your business purchases and pay over the difference to HMRC. In net terms your business would pay no VAT. Only non-VAT registered businesses and individuals pay VAT.

Expert:  TonyTax replied 4 months ago.


I'm just following up to find out if my answer helped or if you have any further questions. If not, would you mind rating my answer so that I get credited for my work.