VAT reg'd or Ltd Co?

[igottacabstar]

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

 

The thing is it's the customer who pays the VAT, not you. You then claim back the VAT on your purchases in return for doing this tax collecting service. I can see it being a problem if you're competitors are not VAT reg'd and you're doing mainly private work. Most of my serious competitors are VAT reg'd so it's no problem.

[Log-ologist]

I don't see the point of vat registration.

 

 

When they ask you to join the vat club you do ,they are bigger crims than the Mafia.

 

 

I was " asked " to join.

[igottacabstar]

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.

 

 

If you were doing tree work everyday then you would easily be over the VAT threshold. Just depends if you're working part time through choice or just because the work's not there. If you keep at it I'm sure you could have 5 days a week in the future, if you wanted, then you would have to be VAT reg'd.

[igottacabstar]

When they ask you to join the vat club you do ,they are bigger crims than the Mafia.

 

 

I was " asked " to join.

 

Agree, but VAT is just a tax like any other - all goes in the same pot.

[bill]

im not vat reg, dont really understand the tax system, all i know is the less i pay the better. as far as im concerned they are robbing bast....

[igottacabstar]

im not vat reg, dont really understand the tax system, all i know is the less i pay the better. as far as im concerned they are robbing bast....

 

If you're VAT reg'd it's not you that pays it - it's your customers. You can then claim all the VAT back on your business expenses - you're the winner. I think some people that are new to charging VAT forget that the VAT element of their bill is not theirs, then they feel like it's them paying the VAT at the end of the quarter- which is wrong. You charge what you want for the job plus VAT.

[igottacabstar]

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?

 

Yes, you can back date your expenses on your first return by 3 years - so a nice lump sum if you've bought any big pieces of machinery.

[skyhuck]

If you're VAT reg'd it's not you that pays it - it's your customers. You can then claim all the VAT back on your business expenses - you're the winner. I think some people that are new to charging VAT forget that the VAT element of their bill is not theirs, then they feel like it's them paying the VAT at the end of the quarter- which is wrong. You charge what you want for the job plus VAT.

 

[Steve Bullman]

thats whats holding me back form going vat registered, dont know if im discipline enough to keep the vat back that i received to pay the vat man....although i dont think im going to have a choice in the matter this year

[igottacabstar]

thats whats holding me back form going vat registered, dont know if im discipline enough to keep the vat back that i received to pay the vat man....although i dont think im going to have a choice in the matter this year

 

As long as you don't empty your business account every month it shouldn't be a problem. You might want to transfer the VAT you collect to a different account though just so you don't start thinking of it as yours!