He should ring the Revenue Commissioners VAT section before putting anything to paper or on ROS to be certain, explaining the oversight and askign for written confirmation of what corrective measures he should take, if any.
If you approach them from a point of view of someone needing advice I doubt you will do yourself or your company any harm.
I've just filed my own Income Tax return for the first time and they couldn't have been more helpful.
You are free at any time to take professional advice should matters not go as well as expected.
I am not an expert in VAT and tax matters as might be inferred from above.
Guys.....
The VAT threshold is the amount net of VAT ie €37500 multiplied by the relevant VAT rate applicable.
2.3 How is the threshold determined?
For the purposes only of deciding if a person is obliged to register for VAT, the actual turnover may be
reduced by an amount equivalent to the VAT borne on purchases of stock for re-sale. For example, a
trader whose annual purchases of stock for re-sale are, say, c60,000 [c49,587 plus c10,413 VAT at 21%]
and whose actual turnover is, say, c80,000 inclusive of VAT, is not obliged to register.This is because the
traders turnover, after deduction of the c10,413 VAT charged to him or her on purchases of stock, is
below the registration limit of c75,000.
If he had then registered for Vat in December, registration would have been effective from the start of the next two month period, ie Jan to Feb 2011. But there was no trading in this period.even going by the turnover to the end of November, this was not to be expected.
Sorry this is crazy advice. He might as well write to them asking for a VAT bill. He needs professional advice on how to handle this. There may well be no problem with exceeding the VAT threshold so marginally, but if he approaches Revenue without having his homework done, and encounters the wrong sort of by-the-book Revenue official he could end up with a VAT liability that may well have been legitimately avoided had he got proper independent assistance.
Hi
"An accountable person established in the State is not required to register for VAT if his or her turnover does not reach the appropriate threshold above."
As you will all no doubt agree, VAT is not turnover.
So if an accountable person with say €40,000 turnover, registers for VAT, their turnover will fall to €35242 (if 13.5%) or €33,057 (if 21%). Thus they are not obliged to register because their turnover is below the threshold.
But if the OP contends that their takings include an element of VAT, the Revenue may/will then contend that the VAT should therefore be remitted to Revenue?
T McGibney, sorry I don't understand what you meant here:
If you argue to Revenue that your takings include VAT, they may/will demand that you pay this VAT to Revenue.
Thanks for clarifying - none of his invoices have VAT on them as he was not VAT registered, so there would be no VAT in the takings.
Informal advice he got today was to issue a credit note for the last 2010 invoice?
I know it would be bad if he had kept trading as a sole trader in 2011 without charging VAT, but I had hoped the fact that he ceased trading just after crossing the threshold (and switched to a VAT registered partnership) would make the situation OK.
Maybe the 'VAT borne on purchases' concession mentioned above might otherwise pull his turnover below the threshold?
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