Individuals queuing for VAT should not telephone Revenue & Customs to check when they will be served unless they want the average waiting time of 38 days to increase.
Providing good service to taxpayers is “a top priority,” the department added in an online notice, which said HMRC is to provide monthly updates on the latest processing times.
The Institute of Chartered Accountants in England and Wales has said the ‘VAT Waiting List Problem’, which covers paper & electronic submissions, is the biggest VAT issue for clients.
Without receiving a valid VAT number, micro businesses, such as freelance consultants, potentially face cash flow problems because they struggle to get their invoices paid.
But all company owners are required to account for and pay any VAT due from the date it is liable to be registered, the ICAEW’s Tax Faculty warned yesterday.
Therefore people waiting to register for VAT, should consider issuing proforma invoices, on the condition that they will issue proper VAT invoices when they receive their number.
Individuals who send proforma invoices should pen a covering letter or footer on the document making clear the informal document will precede a genuine VAT invoice.
But the Faculty reminded traders: in “no circumstances should VAT be separately itemised on an invoice, as it is illegal for a business to charge VAT while not registered.”
Ideally, any charge made should be sufficient to include the VAT liability that will be incurred once the VAT registration has been obtained, the group said.
However as customers will be unable to claim this back without the supplier’s VAT registration number, they may not be prepared to pay in advance.
The Faculty added: “In such circumstances, it will be necessary to make a further charge when issuing the VAT invoice at a later date.”
Other business were advised to ensure the prices they charge are sufficient to include any VAT that may become payable after the VAT registration has been obtained.
The advice comes after the government admitted that delays to VAT are “unacceptable,” which followed calls from the accountant Hacker Young that the entire VAT system, because of its complexity, is in need of an overhaul.
Jul 25, 2007
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