Tax year, trading year and VAT

J

JanuaryJones

Registered User
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I'm going to register as self employed and am a bit confused re filing accounts. Believe that for Revenue my first year of accounts go from now till end of 2012. I'm not going to make over 75k in sales by the end of the year but I may do next year. So where does that leave me re VAT - it's a business to consumer, not B2B.
Can anyone advise?
 
The VAT threshold is on a rolling 12-month basis and the calendar year and/or tax year is irrelevant. Therefore if you think your turnover will be greater than €75K in the next 12 months then you have to register for VAT. If not then in November you have to ask yourself the exact same question and so on.
 
JanuaryJones said:
I'm going to register as self employed and am a bit confused re filing accounts. Believe that for Revenue my first year of accounts go from now till end of 2012. I'm not going to make over 75k in sales by the end of the year but I may do next year. So where does that leave me re VAT - it's a business to consumer, not B2B.
Can anyone advise?
Click to expand...

You can make up accounts to whatever date you like, but you will be taxed for 2012 on the profits made between the date you commence trading and 31/12/12.

Say you started business on 1/9/2012 and you prepare your first set of accounts up to 31/12/2013 (16 months accounts), then for 2012 you will be taxed on 4/16ths of your profit, and in 2013 you will be taxed on 12/16ths,
 
Thanks for your help.
re the VAT question again. Say within 12 months I achieved sales of 100k but hadn't initially registered for VAT do I just have to pay the VAT anyway? I presume that VAT on purchases I've made can reduce the VAT bill?
 
@januaryjones

To clarify the VAT - and its on a calender year basis. in 2012 if you exceed the threshold then you are liable to pay VAT over on the whole lot. No excess. If you don't think you will exceed and becasue its a B2C then you don't have to register. Whilst you will be able to claim the full costs incl VAT against sales you wont be able to claim VAT.

2013 - if you are likely to exceed the threshold then you should register in 2013 because if you exceed the threshold you will be liable for the full year.

If 2013 is marginal - and you can delay being paid into 2014 for some - you could register then.

If B2B as most will be VAT registered they will reclaim VAT and usually its a good idea to register.
 
@DB74
s1 VAT Act refers to accounting year as being 31 December;
similar reference in 2B FA 2008 about accounting periods and tax periods.
Hard to say its 'incorrect' as opposed to a differnt interpretation - and Revenues interpretations are somewhat often unchallenged.

What it means is vigilance and if you are a B2B why would you not register anyway?
 
WizardDr said:
@DB74
s1 VAT Act refers to accounting year as being 31 December;
similar reference in 2B FA 2008 about accounting periods and tax periods.
Hard to say its 'incorrect' as opposed to a differnt interpretation - and Revenues interpretations are somewhat often unchallenged.

What it means is vigilance and if you are a B2B why would you not register anyway?
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It is incorrect and not a matter of interpretation. It is set out quite clearly in Section 6(1)(c)(i) (regarding the supply of goods) and 6(1)(d) (regarding services) VAT Consolidation Act, 2010.

To paraphrase the section, a person supplying taxable goods or services shall not be an accountable person (and therefore will not be required to register for VAT) if their turnover has not exceeded and is not likely to exceed the relevant threshhold "in any continuous period of 12 months".
 
You are reading from a 'Guide' which is not the Act. Keep saying incorrect and I will start posting where the Revenue lose cases on interpretaion.
 
smeharg said:
... Section 6(1)(c)(i) (regarding the supply of goods) and 6(1)(d) (regarding services) VAT Consolidation Act, 2010.
Click to expand...

WizardDr said:
You are reading from a 'Guide' which is not the Act. Keep saying incorrect and I will start posting where the Revenue lose cases on interpretaion.
Click to expand...

Eh, the VAT Consolidation ACT is the ACT!!


I have given the precise legislative reference, I suggest you give it a read.


You can post references of cases if you like, but good luck to you trying to argue that "any continuous period of 12 months" means a calendar year.
 
WizardDr said:
You are reading from a 'Guide' which is not the Act. Keep saying incorrect and I will start posting where the Revenue lose cases on interpretaion.
Click to expand...

Please do, access to such cases could be of help to practitioners/traders.
 
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