I am a contractor with a limited company, not registered for VAT as to date I have been under the VAT threshold.
As well as my own activities I am helping out a friend's company (my friend's business and my own contracting activities are different and not linked). This has been on an informal basis to date, but we've now agreed that I will get paid for my work (including work in past years) once my friend's company reaches a particular stage and so is in a position to do so.
I would like to invoice my friend's company, but know that I won't be paid for some time (could be more than a year), so am considering invoicing personally (as self-employed) rather than through my limited company so as to be able to account for this on a cash basis (it would be very inconvenient to have to pay tax on these amounts already, a long time before receiving).
In the present year the combined income, even fully on an accounting basis, would be below the VAT threshold. However, there is one past year where, if everything was on an accounting basis, I would have been over the threshold (if I invoice my friend's company a reasonable amount for the work in this period).
Am I risking falling foul of the VAT disaggregation rules in that past year?
And, if not, would I suddenly need to charge VAT retrospectively at the point in future where I receive the payment for multiple past year's work, even if the amount charged each year is below the VAT limit?
Thank you
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