Cornel

I am a VAT registered sole trader and I am facing a strange situation. It s a transport business industry. I have Vat and non vat registered subcontractors -and here is an example of what happens to me: Let s say I am getting £1200 from my client ( I have received £200 VAT) then I have to pay a VAT reg. subcontractor £600( 500net +100 VAT) and I also pay other non VAT reg. subcontractor £600. No money left in the bank account but I still owe to HMRC £100 ???!!! Also when I do my quarter VAT returns I register all my VAT expenses ( mostly towards Vat reg. subcontractors) but how should I mark a VAT payment towards HMRC ? As a Vat exempt ? Or just an expense like any others (i.e.-non VAT registered drivers) I mention my client is owing me money as he felt way behind with payments towards me ,this is the reason I have to spend all on subcontractors. Please any advise will help !  P.s. I am afraid if he declares bankrupt all this liability falls on me and I don't know which will be the legal meanings to get out of this situation. Thank you !

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