Vat business split

[Steve Bullman]

quartely

[donnk]

or monthly if you find cash flow is hard.

[Jamie Jones]

The answer is YES and NO.

 

A friend has a pub that is also B&B and they got to the VAT threshold and wanted the B&B to not be vat registered where as the pub/food side would be... Big no no from the accountants..

 

As a sole trader or small partner ship it would be almost impossible.

The only way that you could run two businesses separately is if they were both separately set up as limited companies, but then you would have to adhere to a whole host of complications.

 

[DanBous]

So are there any tree surgery one man bands on here (using subbies as necessary), doing mainly small domestic trees and hedges, with a few small council/public jobs mixed in, which have gone VAT registered?

How did you find it affected your workload?

Did you lose more quotes than before?

Did you have to get an accountant if you didn't have one before?

[bankhouse builder]

Just a thought why don't you set up a plant hire business for the chipper alone and hire that charging vat to your other business no cross over then  you could do this with any other large items.

 

 

Edited October 18, 2018 by bankhouse builder

[Phil71]

On 16/10/2018 at 19:34, DanBous said:

So are there any tree surgery one man bands on here (using subbies as necessary), doing mainly small domestic trees and hedges, with a few small council/public jobs mixed in, which have gone VAT registered?

How did you find it affected your workload?

Did you lose more quotes than before?

Did you have to get an accountant if you didn't have one before?

Yes, I have. You'll always lose out on some quotes because of VAT but generally if you have a good customer base and a good reputation then you should still be busy. I'm lucky to live in an area where there are a lot of trees and a lot of money so usually there is more than enough work. Even if you aren't VAT registered, there will always be someone who will quote cheaper so don't worry about it.

 

 

[Squaredy]

On 16/10/2018 at 19:34, DanBous said:

So are there any tree surgery one man bands on here (using subbies as necessary), doing mainly small domestic trees and hedges, with a few small council/public jobs mixed in, which have gone VAT registered?

How did you find it affected your workload?

Did you lose more quotes than before?

Did you have to get an accountant if you didn't have one before?



 

It MIGHT be possible for you to treat the stump grinder as a separate business; as another poster said maybe hiring to your main business.  But it is a whole can of worms lots of extra costs maybe needing specialist advice separate bank accounts etc etc.

 

i think you are right to be now considering just registering for VAT.  The big questions are will you lose business, and will it save you a lot on VAT?  If you spend a lot on VATed items this will partly make up for having to charge your customers VAT.  

 

On the other hand if very few of your costs are VATable like wages, insurance, then being VAT registered will only help you with the new grinder and similar purchases.

[DanBous]

I thought it was simple in that I charge vat on all my services, pay that to hmrc. Then everything I buy like machinery, tools, fuel, materials etc, I claim all the vat back???
I had a read on hmrc website, seems like they are saying you work out the difference between what you've charged in and what you've paid out and that's what you get? Confused.

[Squaredy]

1 hour ago, DanBous said:

I thought it was simple in that I charge vat on all my services, pay that to hmrc. Then everything I buy like machinery, tools, fuel, materials etc, I claim all the vat back???

Yes that is correct - but it all happens in one go. 

 

So you do your VAT return and work out what you owe HMRC.  In other words all the VAT you have collected for them as an unpaid tax collector; and then you take off what you have already paid them in VAT on purchases. 

 

For example, if in a quarter you have collected £2,000 in VAT and spent £3,600 on VATed items (which would usually mean you have already paid them £600 in VAT) you would then have to pay them £1,400.  Make sense?

[DanBous]

Thanks [emoji3]
So in the first quarter, what I will collect for them will be far less than what I have paid because I can go back 4 years and claim for tools/machinery that I still have. So my first VAT return would be good news for me??!