Not registered for Vat

[Vinnyirl]

I provide transport services to various media companies.

So basically simplified version of how it works is , media company hires a vehicle and i drive it , i fill the vehicle with fuel purchased on my company credit card and then charge it back to the media company with a added % administration charge added.
So i purchase £10 diesel i charge media company £11 , i hand over the diesel receipt to the media company with my invoice for £11.

My company is new not registered for vat , i have no need to register for vat and i am not claiming any vat , but now the media company is asking for my vat number to be added to the invoice.

So my question is do i need to register for vat and if not what do i need to tell or prove to the media company that i am not registered and i am not claiming or charging vat.

 

[NicoJ]

You don't have to register if your turnover is under the threshold (£85k). You just need to inform your customer that you aren't registered.

The diesel receipt is yours so you shouldn't be giving this to your customer at all.

EDIT just reread that the customer hires the vehicle so the cost of the fuel is theirs.

 

[JEREMY HAWKE]

No you tell them you are not vat registered and this should make no difference to your agreement /relationship with them
You don't need to prove your vat status because your not charging vat

 

[DontAsk]

The media companies may want to deal with VAT registered entities in order to account for input VAT.

 

[Daybooks]

No “so’s” or “basically’s” required.
Simplified answer:
You don’t have to register for VAT unless it becomes mandatory and you do not have to prove you are not registered as you are not attempting to charge VAT. You only need to prove you are VAT registered if you are charging VAT.

More complex considerations:
You client is paying you for fuel, including VAT, plus an admin fee. However they cannot recover that VAT. If you were VAT registered it would not be an issue. If your client wants to recover the VAT on the fuel purchase they will have to come to some other arrangement with you.

 

[NicoJ]

No “so’s” or “basically’s” required.
Simplified answer:
You don’t have to register for VAT unless it becomes mandatory and you do not have to prove you are not registered as you are not attempting to charge VAT. You only need to prove you are VAT registered if you are charging VAT.

More complex considerations:
You client is paying you for fuel, including VAT, plus an admin fee. However they cannot recover that VAT. If you were VAT registered it would not be an issue. If your client wants to recover the VAT on the fuel purchase they will have to come to some other arrangement with you.

The fuel would meet the criteria of a disbursement(given that the vehicle is hired by the customer) so as long as the admin fee is separated out I would see no reason the customer can't claim the VAT on the fuel.

 

[Daybooks]

The fuel would meet the criteria of a disbursement(given that the vehicle is hired by the customer) so as long as the admin fee is separated out I would see no reason the customer can't claim the VAT on the fuel.

The provision of the fuel “appears” to be part of the service. That is why probably best for them to review the arrangements and / or possibly why client seeking VAT registration details.

 

[DWS]

Is it a disbursement or a recharge?
What’s in the contract? That should clear it up
Also has IR35 been considered, could be that you are a deemed employee!

 

[UK Contractor Accountant]

The contract for the supply of fuel is between the garage and the OP - its his/her cost which is then recharged without VAT shown on the invoice.

 

[MyAccountantOnline]

I provide transport services to various media companies.

So basically simplified version of how it works is , media company hires a vehicle and i drive it , i fill the vehicle with fuel purchased on my company credit card and then charge it back to the media company with a added % administration charge added.
So i purchase £10 diesel i charge media company £11 , i hand over the diesel receipt to the media company with my invoice for £11.

My company is new not registered for vat , i have no need to register for vat and i am not claiming any vat , but now the media company is asking for my vat number to be added to the invoice.

So my question is do i need to register for vat and if not what do i need to tell or prove to the media company that i am not registered and i am not claiming or charging vat.

With your current arrangement your client can't claim VAT on expenses you've incurred and you should simply inform them you are not VAT registered and as such don't add VAT to your charges.

Have you considered making a voluntary VAT registration? It may actually be beneficial to you.

 

[Vinnyirl]

Thanks everyone for the replys they have been a great help ,
i will have to do some research on a voluntary vat registration as not sure what it entails

 

[MyAccountantOnline]

Thanks everyone for the replys they have been a great help ,
i will have to do some research on a voluntary vat registration as not sure what it entails

It means you choose to register for VAT voluntarliy rather than waiting until your turnover reaches the VAT threshold and having to register.

It's something to discuss with your accountant to make sure it is beneficial to you and to make sure you use the most beneficial VAT scheme.