Question Author
OK guys, maybe i need to explain things a little better. My business is supplying contract staff. I only have 8 contractors out working, but my weekly invoice figure is currently over �5000 per week. I will therefore soon pass the �68,000 threshold. Because turnover in this area of business is so high, I was told to register for VAT from the start. So the application was put in on 15th January. You are NOT allowed to charge VAT on your invoices without a registration number, as a separate charge. The VAT office recommends that you incorporate VAT into your net invoice figure until you receive your registration. This however would cause a tremendous headache, and does not make good business sense. The VAT office is simply giving themselves time because they are woefully understaffed, and are also having to deal with a record number of insolvencies. Once my registration finally arrives, I will have to send all my clients an invoice for 6 months of backdated VAT. This is not an expense for them, because they can very soon reclaim it. I on the other hand cannot reclaim anything until I have my registration. Which brings me back to the original question. I am having to pay VAT to the contractors on my payroll, because they work through Umbrella Ltd Companies. This money has to be borrowed from the bank, so I am paying interest on the money I have to pay out in VAT, because I have had to wait for so long. So my question is, will I be able to apply for compensation because of the time the VAT office have taken?
The other thing I would like to point out is the VAT office recommends you do not chase them for progress, as this will hinder your application!!!!