VAT Threshold

[finest123]

My friend has had some advice from the same accountant I have used for over 10 years regarding VAT threshold. I am 99.9% sure this is a stupid question but since its coming from my accountant to him I wanted to double-check. Here is the full story in case something makes a difference.

He registered a company in Aug-2021 and started trading Jan 2022

He has done his first company account return which was due Aug 2022.

The accountant is basically saying his VAT threshold will start from Sept 2022 and as such he does not need to register for VAT.

Am I missing something? I am sure its the last 12 months of trading and he was over the threshold last month so would need to register for VAT on 1st Decemeber

Once again, I know its a stupid question but it's from an accountant who has over 40 years of experience

 

[japancool]

It's a rolling 365 days, according to my accountant. It's not the amount over a single financial year.

Are you saying that between Jan 2022 and October 2022, he turned over £85,000+?

 

[finest123]

exactly at the end of October 2022 he went over. so has 30 days to register as I read it

HMRC website
"You must register if, by the end of any month, your total VAT taxable turnover for the last 12 months was over £85,000. You have to register within 30 days of the end of the month when you went over the threshold. Your effective date of registration is the first day of the second month after you go over the threshold."

I just do not know why an experienced accountant could get this wrong. so I just wanted to make sure I was not missing anything

thanks

 

[Newchodge]

My friend has had some advice from the same accountant I have used for over 10 years regarding VAT threshold. I am 99.9% sure this is a stupid question but since its coming from my accountant to him I wanted to double-check. Here is the full story in case something makes a difference.

He registered a company in Aug-2021 and started trading Jan 2022

He has done his first company account return which was due Aug 2022.

The accountant is basically saying his VAT threshold will start from Sept 2022 and as such he does not need to register for VAT.

Am I missing something? I am sure its the last 12 months of trading and he was over the threshold last month so would need to register for VAT on 1st Decemeber

Once again, I know its a stupid question but it's from an accountant who has over 40 years of experience

Slight pedantry here. He would need to register during November, so the start of the registration period will be 1 December.

 

[finest123]

Slight pedantry here. He would need to register during November, so the start of the registration period will be 1 December.

Thank you for confirming I am right. If he did not show me the e mails I would have never believed him that my accountant would tell him this.

I'll be looking for a new accountant and suggest he does the same.

thanks again

 

[UK Contractor Accountant]

Once again, I know its a stupid question but it's from an accountant who has over 40 years of experience

Old school Accountant - not up to date with his/her CPD (Continuous Professional Development)!

 

[finest123]

Old school Accountant - not up to date with his/her CPD (Continuous Professional Development)!

I believe this has changed a long time ago. Its madness

 

[MyAccountantOnline]

My friend has had some advice from the same accountant I have used for over 10 years regarding VAT threshold. I am 99.9% sure this is a stupid question but since its coming from my accountant to him I wanted to double-check. Here is the full story in case something makes a difference.

He registered a company in Aug-2021 and started trading Jan 2022

He has done his first company account return which was due Aug 2022.

The accountant is basically saying his VAT threshold will start from Sept 2022 and as such he does not need to register for VAT.

Am I missing something? I am sure its the last 12 months of trading and he was over the threshold last month so would need to register for VAT on 1st Decemeber

Once again, I know its a stupid question but it's from an accountant who has over 40 years of experience

I'd query this with the accountant again and make sure you get a written response.

It may be that their is relevant information that we dont have.

 

[finest123]

I'd query this with the accountant again and make sure you get a written response.

It may be that their is relevant information that we dont have.

He has questioned him three times and pointed to the HMRC website all by e mail. His written reply is you need to go from September 2022 and he will check the turnover each month.

Everything I have said above is all the details

 

[MyAccountantOnline]

He has questioned him three times and pointed to the HMRC website all by e mail. His written reply is you need to go from September 2022 and he will check the turnover each month.

Everything I have said above is all the details

I dont understand this at all -

The accountant is basically saying his VAT threshold will start from Sept 2022 and as such he does not need to register for VAT.

I really would go back to the accountant again and specifically ask why, if your friend exceeded the VAT threshold by 31 October 2022 he hasn't got to be registered for VAT by 1 December.

Is it at all possible that you've included some income in your figures which should be excluded?

Its just it's such a fundamental matter for an accountant to advise a client on.

 

[finest123]

I dont understand this at all -

The accountant is basically saying his VAT threshold will start from Sept 2022 and as such he does not need to register for VAT.

I really would go back to the accountant again and specifically ask why, if your friend exceeded the VAT threshold by 31 October 2022 he hasn't got to be registered for VAT by 1 December.

Is it at all possible that you've included some income in your figures which should be excluded?

Its just it's such a fundamental matter for an accountant to advise a client on.

exactly and I have seen all the emails with him quoting the figures and showing the exact turnover for the last 10 months. Each time he just goes back to say that he needs only to start counting his turnover from Sept 2022 and not to look back any further. I really would not believe my friend if I did not see the e-mails.

This is why it worries me about my accounts now since he has been doing them for such a long time

 

[Newchodge]

exactly and I have seen all the emails with him quoting the figures and showing the exact turnover for the last 10 months. Each time he just goes back to say that he needs only to start counting his turnover from Sept 2022 and not to look back any further. I really would not believe my friend if I did not see the e-mails.

This is why it worries me about my accounts now since he has been doing them for such a long time

Has he asked the simplest question - WHY? Just as simple as that Why do I ignore turnover in the months January to August 2022?

 

[MyAccountantOnline]

Has he asked the simplest question - WHY? Just as simple as that Why do I ignore turnover in the months January to August

That's exactly what he needs to ask.

Do come back and let us know the response.

 

[japancool]

I suspect the accountant thinks, because the company was formed in August 21, the VAT threshold runs from year-end to year-end.

 

[finest123]

yes he has already and his reply is because of the company accounting period which is not correct as we know. its 12 months rolling. I just wanted to check I was not missing some special rule or something.

I think its best I talk to him directly about this and see his reply because I have lost confidence in him

 

[Newchodge]

yes he has already and his reply is because of the company accounting period which is not correct as we know. its 12 months rolling. I just wanted to check I was not missing some special rule or something.

I think its best I talk to him directly about this and see his reply because I have lost confidence in him

So follow that up with another simple question - Do you mean that the registration requirement for VAT is caculated based only on income during the company accounting year and resets at the start of every new accounting year?

 

[finest123]

within an hour of my e-mail to him, explaining the situation as clearly as possible, He emailed my friend to say he does need to be VAT registered for 1st December and he thought the company had started trading in Aug 2021, and not Jan 2022.

This makes no difference because its the last 12 months of trading

So needless to say he is moving accountants

 

[WaveJumper]

Whats the betting the accountant has got a work experience person in doing some work and he's taken his eye right off the ball. As you say a change maybe well called for but you say you have used him for ten years, have you ever had any other issues with the accountant

 

[finest123]

Whats the betting the accountant has got a work experience person in doing some work and he's taken his eye right off the ball. As you say a change maybe well called for but you say you have used him for ten years, have you ever had any other issues with the accountant

Never had any other issues with him or known issues. Just concerned he has now been doing something wrong with my company account submissions and I've missed it

 

[finest123]

He spoke to my friend on the phone to explain he did not need to register when he kept questioning it. so no way there was a work experience in

 

[WaveJumper]

He spoke to my friend on the phone to explain he did not need to register when he kept questioning it. so no way there was a work experience in

As you say seems like time for a change

 

[Newchodge]

Whats the betting the accountant has got a work experience person in doing some work and he's taken his eye right off the ball. As you say a change maybe well called for but you say you have used him for ten years, have you ever had any other issues with the accountant

I don't think that matters. This is so fundamental that the accountant getting it so wrong would be the equivalent of a complete breakdown of trust and confidence between the parties.

OP find a new accountant.

 

[AndreasC]

Rather than try to understand why they got it wrong you should move on and find another accountant. I'm an accountant as are others on this thread who know the rules and can provide you with a better service

 

[MyAccountantOnline]

within an hour of my e-mail to him, explaining the situation as clearly as possible, He emailed my friend to say he does need to be VAT registered for 1st December and he thought the company had started trading in Aug 2021, and not Jan 2022.

This makes no difference because its the last 12 months of trading

So needless to say he is moving accountants

Thanks for updating to let us know what happened.

Out of interest was the accountant your friend used qualified?

 

[WaveJumper]

Thanks for updating to let us know what happened.

Out of interest was the accountant your friend used qualified?

I think we will all be a bit surprised if he was, but would be interesting to know

 

[finest123]

Thanks for updating to let us know what happened.

Out of interest was the accountant your friend used qualified?

Yes, an accountant for over 40 years. He is an employee of the company, a very nice man and I had total trust in him until this. I can only think his age is catching up with him. I will be contacting you and the accountants here for a chat.

 

[Paul Kelly ICHYB]

Out of interest was the accountant your friend used qualified?

Not many people realise that the term Accountant is not protected i.e. anyone can call themselves an accountant, regardless of if they have ever had training and qualifications or not!

 

[MyAccountantOnline]

Yes, an accountant for over 40 years. He is an employee of the company, a very nice man and I had total trust in him until this. I can only think his age is catching up with him. I will be contacting you and the accountants here for a chat.

I'll certainly be very happy to assist if you want to get in contact.

It's particularly sad to see that your accountant has given you incorrect advice after acting for you for a long time, and having been an accountant for so long, however I really would be surprised if he was qualified.

I do think a formal complaint should be made to his firm if you haven't already done so, at the very least to ensure he is given adequate training on VAT registration. That mistake could have been a costly one to you, and his firm.