Invoicing a non-VAT registered company

[CupOfTea]

Good afternoon folks,

If we invoice a UK LTD company, for some consultancy fees, they are not VAT registered, but we are, what would be the procedure?

In this instance, the fee we are charging is £1150 would our invoice, simply state they owe us £1150, or would it need to show the before VAT price also?

Kind regards,

Ed

 

[David Griffiths]

Within your own records you'll need to show VAT separately. - £958.33 + £191.67 (seems an odd amount) However you can send the customer an invoice which just has a total price on it

 

[CupOfTea]

David, perfect answer, thanks very much,
Ed

 

[HSCA]

But you realise that you are effectively absorbing the £191 VAT don't you??? You have to pay this across to HMRC.

If your fee for this service is normally £1,150 then you would generally charge:-

£1,150 Fee
£230 VAT
£1,380 Total

& it would be the same whether your (UK) customer was VAT registered or not.

 

[roydmoorian]

Good afternoon folks,

If we invoice a UK LTD company, for some consultancy fees, they are not VAT registered, but we are, what would be the procedure?

In this instance, the fee we are charging is £1150 would our invoice, simply state they owe us £1150, or would it need to show the before VAT price also?

Kind regards,

Ed

The Fee is £1150 - The VAT is on top of that and needs to be charged to your customer, it is non of your concern whether or not they are VAT registered.

 

[CupOfTea]

Hmmm, so I am losing out, I actually am a partner in the 2nd company, so it's me invoicing them to save me having a 'salary' from them, as otherwise I end up being hit by BR tax on any earnings, whereas I can use my main company to invoice for the (relevant) services and just pay the tax as I would normally on a wage from the main company, I guess the absorbing £191 VAT still works out cheaper than paying BR tax, or should I be using another method?

 

[nelioneil]

Unfortunately it does not matter if the customer is VAT registered or not. As your company is, and is providing a VATable service, you bill the customer as you would to a VAT registered business.