Vat Registration - what happens when...

[Anonymous]

This is a big possiblilty so this question is aimed for planning my future move.

Most of my income is and will be coming from tax exempt companies so they do not include and will never include VAT on payments. If my total received by said companies goes over the £60k threshold am I still meant to register for VAT? From what I've read its a no, as it's not taxable income - would I still need to inform them I'm over the limit and would I then be open to inspection at any time?

Also if I'm paid in US Dollars from a company based in Gilbraltar who again would pay no tax on payments.. would that also be in the untaxable bracket and therefore not counted towards the threshold?

I've only just registered as self employed and trying to get a feel for whats involved and what gets counted/ignored.

TIA

[gj]

What is relevant here is your VAT status and the supplies you make (that they then pay you for).

If your supplies are not exempt, then you will need to register if you exceed the thresholds, and charge them VAT.

You may be getting confused as to what is an out put and what is an input - you need to think in terms of the products or supplies - not the money. So an output is something that you supply and an input is something you buy in.

HTH

Graham

[multilingual]

Put simply, you need to register for VAT if your turnover exceeds the threshold, regardless of where the money comes from or whether it has VAT on it or not.

Also, your comment saying that companies "will never pay VAT" may not be entirely correct. Depending on what you are selling them, how you sell it to them and how it is delivered may put you into a position where you will need to charge VAT even if they are companies based abroad. All companies within the EU for example have to account for cross border VAT even if they do not actually charge VAT!

:)

JB

[Anonymous]

I read over on the HMRC site:

You must register for VAT when the value of your:
(a) taxable supplies (see paragraph 1.4) or
(b) distance sales (see section 5) or
(c) acquisitions (see section 6)
go over the limits specified in the supplement to this notice.

My total tax exempt supplies will be over the threshold however my taxable supplies will not reach the threshold.

Regarding the 'will never pay VAT', it's a tax exempt industry so Im quite confident in the rules and regs of that.

So if i undertsand it correctly I wouldnt be able to register (unless they grant me voluntary reg) because my taxable supplies do not meet the required amount? Seems quite simple now ive written it out again but its nice to get others opinions if Im heading down the wrong path !