Can you raise an invoice before you have your VAT number?
Sometime it is necessary to raise sales invoices between registering VAT and the VAT number being sent out to you by HMRC. This leads to the problem of how you charge VAT when you don’t have a valid VAT number.
There is a solution but it’s a bit messy …
HMRC have some guidance on the matter here.
In short though you need to raise an invoice with your prices inflated by 20%, then say to your client that you will re-invoice the same amount with VAT on it once your number has come through.
So an example:
You have sold £100 worth of services to your client. Once VAT registered you would be charging £100 + £20 of VAT = £120.
Before the code arrives
Raise an invoice to your client for £120. Do not mention VAT at all on the invoice. It’s as if you are not registered for VAT and have sold £120 worth of services.
Tell your client in a covering email or in person that your VAT registration is pending and that you will raise an invoice for £120 that includes VAT as soon as you get your VAT number.
After the code arrives
Edit the earlier £120 invoice so that it includes your VAT number and is now for £100 + £20 VAT = £120 (ie. a normal invoice for a VAT registered business). Send this invoice to your client.
So it’s not totally straightforward but if you need the cash now it is better than waiting for your registration to come through.