VAT Registered

[treevolution]

3 hours ago, dig-dug-dan said:

What he said!

And to answer the van question, if the van is 20,000 plus vat. You have to pay the dealer 24,000, then claim 4000 back from hmrc. Its not income so its not taxed

But it would have had to be an  income before you paid it to hmrc and so would be taxable after you reclaim it back if you did not put it back into the business and draw it as earnings. 

 

I could be totally wrong but can't find anything on the gov website that says reclaim VAT is tax free. 

 

I see it as you have to earn the money to pay the VAT through work and if you can then claim that back and its taken as a profit then you would be taxed on it as it was an income to start with. 

 

Happy to be proven wrong and going to have a chat with the accountant to clarify. 

 

 

 

 

[Stephen Blair]

You had £10, you charged £10 plus vat for a job.

you now have £22.

you then give £2 to vat man.

you now have £20.

 

VAT is always a Vat, never yours 

[dig-dug-dan]

9 hours ago, treevolution said:

But it would have had to be an  income before you paid it to hmrc and so would be taxable after you reclaim it back if you did not put it back into the business and draw it as earnings. 

 

I could be totally wrong but can't find anything on the gov website that says reclaim VAT is tax free. 

 

I see it as you have to earn the money to pay the VAT through work and if you can then claim that back and its taken as a profit then you would be taxed on it as it was an income to start with. 

 

Happy to be proven wrong and going to have a chat with the accountant to clarify. 

 

 

 

 

I dont think we can explain it any better. Chat to an accountant. 

[Steve Bullman]

9 hours ago, treevolution said:

But it would have had to be an  income before you paid it to hmrc and so would be taxable after you reclaim it back if you did not put it back into the business and draw it as earnings. 

 

I could be totally wrong but can't find anything on the gov website that says reclaim VAT is tax free. 

 

I see it as you have to earn the money to pay the VAT through work and if you can then claim that back and its taken as a profit then you would be taxed on it as it was an income to start with. 

 

Happy to be proven wrong and going to have a chat with the accountant to clarify. 

 

 

 

 

You are 100% wrong 

[Big J]

10 hours ago, treevolution said:

But it would have had to be an  income before you paid it to hmrc and so would be taxable after you reclaim it back if you did not put it back into the business and draw it as earnings. 

 

I could be totally wrong but can't find anything on the gov website that says reclaim VAT is tax free. 

 

I see it as you have to earn the money to pay the VAT through work and if you can then claim that back and its taken as a profit then you would be taxed on it as it was an income to start with. 

 

Happy to be proven wrong and going to have a chat with the accountant to clarify. 

 

 

 

 

As Steve says, you're mistaken.

 

You pay HMRC VAT that you collect on their behalf. HMRC refund you the VAT that you have paid other people as it will be collecting VAT from the people you've paid. It's not income, it's a refund.

[kevinjohnsonmbe]

23 hours ago, Mr. Squirrel said:

I’d just be interested to hear any solid reasons not to. 

You won’t.....  There aren’t any!

[lux]

Also get a decent accountant if you don't already have one. It may be that you are able to claim back the VAT you've paid on some of your pre-existing assets.

Yeah and then any assets going back more than one year you are taxed at 19% on your vat reclaim. Only the first back dated 12 months gets no tax on the vat reclaim. They do love taking the jam out of everyone s sandwich at any opportunity [emoji23]

[Khriss]

Had to explain this to a Builder myself,  you charge then claim it back, basically yr an unpaid tax collector for HMRC at point of sale.  ? K

[Ian C]

Had to explain this to a Builder myself,  you charge then claim it back, basically yr an unpaid tax collector for HMRC at point of sale.  [emoji36] K

Unpaid yes but your reward is being able to claim back all the vat others have charged you that you wouldn’t be able to if you weren’t vat reg!

[Khriss]

I just don't see that as a reward Ian,  company isn't near the thresh hold yet, but will be next year if my other projects take off ( yea that ain't appening this year ? ) as clients will require it.  K