VAT reg'd or Ltd Co?

[bruce tree]

have a look at the flat rate scheme, you only pay a percentage of your turnover and claim back on purchases of £2000+. less paperwork and more profit!

 

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

[Quickthorn]

With the flat rate scheme, there are a few cases where you lose out compared to normal VAT. It depends on how much you lose vs. extra hassle of regular VAT.

 

For example, If you're saying you're in forestry, you pay a flat rate of 9 % on vat inclusive turnover. If you sell firewood, you can only charge 5% vat to the customer. So, if you sell £100 firewood, add VAT @ 5%, you get £105, but you then have to pay £105 x 9% vat = £9.45. From £100 of logs, you're left with £95.55 before you've even started to look at your expenses of cutting, processing, delivering etc. The same's true if you buy in stuff like planting stock etc - you could lose out if you don't put a big enough mark up on the supplies. And - something I've just realised - if anyone's an nptc assessor, you lose even more, as your assessing expenses are zero rated. If you're getting £20/hour, you pay VAT of £1.80 on that, leaving you with £18.20 /hour.

[Buzz]

I applied for the flat rate scheme and got a nice letter back saying i'm not eligabile as my turnover is 1/3rd higher than it really is...I wish !

[Tom D]

I registered for vat last year, because i had to. I was expecting to loose work as much of my work is still domestic, however i have found that I loose the odd job but hardly any really, I gain on the bigger jobs because if you quote for big jobs and are not registered you look like a small company who is perhaps not up to the job. At the end of the day people expect to pay vat and i havent looked back, as has already been said its the customer that pays the vat not you and you get 17.5% off everything including diesel; 88p per litre... nice.

[igottacabstar]

I registered for vat last year, because i had to. I was expecting to loose work as much of my work is still domestic, however i have found that I loose the odd job but hardly any really, I gain on the bigger jobs because if you quote for big jobs and are not registered you look like a small company who is perhaps not up to the job. At the end of the day people expect to pay vat and i havent looked back, as has already been said its the customer that pays the vat not you and you get 17.5% off everything including diesel; 88p per litre... nice.

 

Agree. I found that when I became a Ltd Co I started getting a lot more bigger jobs for other companies, they just assume that you're more professional - if only they knew!!