So you've submitted your registration for VAT, and know VAT needs to be paid on any sales invoices from the registration date - but wait, HMRC says that you can't charge VAT until they confirm your registration.
Confusing huh?
Here's what you can do....
Work out what you would have charged your client including VAT. Eg if your fee is £1000, add 20% VAT to reach a gross amount of £1200
If your client is VAT registered, you can let them know that your VAT registration is pending confirmation from HMRC.
Send the client an invoice for the gross amount including VAT, but do not separate the VAT amount out. It all needs to be one gross figure.
Once your VAT registration has been confirmed, re-issue the invoice to the client (make sure it has the same invoice number) showing the VAT as a separate line and ensuring that your VAT number is included on the invoice. This means VAT registered clients can now reclaim the VAT on your invoice.
Remember if you sell on e-commerce platforms, you will also need to raise your prices there to account for any VAT that you will need to pay once your VAT registration has been received.
I hope that helps! As always, please feel free to drop me a message if you have any questions!
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