I am very close to surpassing the VAT threshold. I’ve currently taken £80,525, and my next payment is due on Thursday.
I told my client that I will have to charge them VAT on the next payment, which is £5,000, so with VAT, it’s £6k.
However, I’ve seen on the UK government website that I can’t charge VAT until I have my VAT number (https://www.gov.uk/vat-registration), which can take up to a month to arrive.
Does this mean that I am prematurely charging VAT and that I don’t have to charge my client VAT on the £5k that they will owe me? Therefore can I actually say to them that the extra £1k can be spent on the project paying me to do more work, rather than giving that £1k to HMRC?
Hopefully this makes sense, thanks in advance!