Pros and cons of being VAT registerd

[Woodworks]

About to take our firewood sideline more seriously and just wondering if there is any advantage to becoming VAT registered. Not planning large turnover so don't envisage needing to do so but don't really know much about the world of VAT.

 

Thanks

[Alycidon]

VAT on firewood to customers that are burning it is 5% ( if they are reselling then 20%) so there is not a lot of downside on the sell out prices. On the upside you can reclaim the VAT on your equipment and fuel etc, at 20% that is I would think worth doing.

 

A

[Woodworks]

VAT on firewood to customers that are burning it is 5% ( if they are reselling then 20%) so there is not a lot of downside on the sell out prices. On the upside you can reclaim the VAT on your equipment and fuel etc, at 20% that is I would think worth doing.

 

A

 

Thanks.

 

Got me wondering if we could do this as a farm diversification instead of a separate business.

 

Food for thought

Edited June 2, 2013 by Woodworks

[farmer_ben]

Im a VAT reg farmer with firewood on the side, definately worth doing in my position. VAT back on cord, machinhery etc but only charge 5% on logs delivered to end user so quite easy to include in the sale price etc. I definately get more VAT back then I charge on firewood

[Woodworks]

Im a VAT reg farmer with firewood on the side, definately worth doing in my position. VAT back on cord, machinhery etc but only charge 5% on logs delivered to end user so quite easy to include in the sale price etc. I definately get more VAT back then I charge on firewood

 

Thanks Ben

 

Sounds like the way to go. Only difference here it will be firewood with a bit of farming on the side as only a smallholding.

[Alycidon]

Thanks Ben

 

Sounds like the way to go. Only difference here it will be firewood with a bit of farming on the side as only a smallholding.

 

That does not matter at all from a VAT standpoint. Processing bought in timber may give you planning issues if some interfering member of the public complains. But cutting perhaps 100 cube over perhaps a 3 month window should not upset to many people. I would run it as an offshoot of the smallholding, register for VAT and keep your head down.

 

A

[Woodworks]

"I would run it as an offshoot of the smallholding, register for VAT and keep your head down." pretty much my plan.

 

Neighbors are happy as have already consulted them but would like to do nearer 300m3 per year. Already done 90m3 with saw and axe for next winter.

[dig-dug-dan]

You cannot register a seperate sideline for vat and not the other. When you register, you are registered not the company, which means anything to do with the small holding will be liable for vat

[rovers90]

You cannot register a seperate sideline for vat and not the other. When you register, you are registered not the company, which means anything to do with the small holding will be liable for vat

 

Thats correct. I went vat registered for the reasons stated but do gardening work in the summer which I have to charge 20% on

[Woodworks]

You cannot register a seperate sideline for vat and not the other. When you register, you are registered not the company, which means anything to do with the small holding will be liable for vat

 

The small holding is already VAT so should be OK ?