VAT reg'd or Ltd Co?

[igottacabstar]

Just wondering how many of you are either VAT reg'd or trading as a limited company? If you started out as a non-VAT registered 'sole trader' and then became either VAT reg'd or incorporated into a Ltd Co, or both - as I did - did this have any adverse affect on your business?

[Quickthorn]

I started out not Vat registered, but then registered voluntarily. I was advised, as a rule of thumb, that if 60% or more of your customers are VAT registered, then so should you be. being registered is probably worth a few grand a year to me.

[Dean Lofthouse]

I don't see the point of vat registration.

 

Corect me if I'm wrong, but you will always owe more vat than you will be owed?

 

Therefore, you are just a tax collector for the revenue.

 

Why have the extra headache.

 

You turn over 70K + vat.

 

You have purchases of 35k + vat

 

You pay the tax man 12.2K

 

He gives you back 6.1k

 

You are no better off

[skyhuck]

I don't see the point of vat registration.

 

Corect me if I'm wrong, but you will always owe more vat than you will be owed?

 

Therefore, you are just a tax collector for the revenue.

 

Why have the extra headache.

 

You turn over 70K + vat.

 

You have purchases of 35k + vat

 

You pay the tax man 12.2K

 

He gives you back 6.1k

 

You are no better off

 

Depends on who you work for,if you work for councils ect, they get the VAT back so makes no difference to them.

When i bought my mog there was £8k VAT:scared:

Most of my competitors are VAT registered so makes no odds even on private work.

[Chris Harris]

I suppose there pro's & cons for both but at the mo i'm managing to stay under the threshold but again i'm only in my second year of trading.Most of my work is domestic with a couple comercial ones & certainly the domestic ones are happy when i tell them theres no VAT to add. I'll just have to cross that bridge when it comes. Am i right in thinking that once you become VAT reg you can claim 3 years back Vat?

[Dean Lofthouse]

Depends on who you work for,if you work for councils ect, they get the VAT back so makes no difference to them.

When i bought my mog there was £8k VAT:scared:

Most of my competitors are VAT registered so makes no odds even on private work.

 

I thought maybe I should when I bought the picker and my new chipper, but they are long term investments and while the lump sum maybe good at the time it soon levels back off again.

 

I do 95% domestic and I get say 7 out of ten jobs I price, I reckon I would take a huge drop in the jobs I got if I stuck VAT ontop.

 

Even if you went down to 5 out of ten jobs that, on my turnover would equate to a £20,000 drop in turnover per year, not worth the hassle.

[skyhuck]

Each to there own,we all now our own business best and whats best for us

[Dean Lofthouse]

One thing I will say though and I have always thought this.

 

The VAT system is an unfair system, why should some be able to claim vat and other not?

 

Yes you can register but that puts others at an advantage over you for pricing in certain circumstances.

 

What should happen, is everyone should be forced to be vat registered. That way the playing field is level.

[treemotion]

What im miles away from hitting vat im in my first year of trading and i love not working all the time i earn enough and cant imagine being able to earn that amount.

 

Im looking forward to the day i break even lol.

 

[igottacabstar]

One thing I will say though and I have always thought this.

 

The VAT system is an unfair system, why should some be able to claim vat and other not?

 

Yes you can register but that puts others at an advantage over you for pricing in certain circumstances.

 

What should happen, is everyone should be forced to be vat registered. That way the playing field is level.

 

HMRCs reasoning for this is they say that a company turning over a larger amount of money (I think £64k at the moment) should be able to swallow the extra costs involved in being VAT registered. A load of rubbish I know.....