VAT registered - why do they ask?

[Big 'Ammer]

It was 65K when I registered. IMO it is impossible to run a van, 1 full time employee, chipper and insurance and stay under vat and work full time. Unless you are earning less than your employee.

 

 

I voluntarily registered for VAT when I first started.

 

Can't be done and run a legitamate outfit 5 days a week with an employee.

 

Discounting one man outfits using as and when assistants.

 

Unless you are a part -timer or run your business as a 'lifestyle' thing, you'll only be working for wages.

 

In which case, your better off sticking your 40 hours a week in for someone else, go home without a care every night and let someone else pay you.

 

Sensibly working on 200 days a year worked:-

 

365 Days

- 104 saturdays and sundays

- 30 days holidays

- 24 days ( 2 days per month maintenence, admin, pricing, etc..)

- 7 days breakdowns, bad weather, illness, unforseen circumstances

= 200 Days.

 

200 days x £340 / day = £68,000

[jojam]

A local businessman once told me that if your not VAT registered your 15% behind your competitors.I think he's right.You always need to issue an invoice for your own records.

[Dean Lofthouse]

 

- 24 days ( 2 days per month maintenence' date=' admin, pricing, etc..)

 

[/quote']

 

Your havin a larf Nige

 

I do between 60 and 70 hours a week.

 

I probably do 4 days a week actual tree work but work seven most weeks and some days you just can't get your day rate because of crappy little jobs.

 

Absolute minimum 1 day per week if you can get away with it, which I very much doubt.

 

I spend between 1 and 2 days per week purely on pricing and maintainance and god know how many hours a night on admin

 

Then when there's nowt in I go split logs which brings a crap wage in. after you cover the costs of the equipment

 

Last week I had the whole week off and never had a minute to myself and today I've just finished a job, dropped the mewp off at another, set off to find the brakes binding on the trailer, so thats another probable day and a half getting parts and carrying out a brake service on the trailer.

 

I can quite easily stay under vat no problem and everything goes through the books with me

Edited May 25, 2009 by Dean Lofthouse

[Big 'Ammer]

No joke Dean.

 

The numbers are hypothetical to give 200 days @ £340 /day to make the VAT turnover example work out at £68,000, the threshold for compulsory registration.

 

The 200 days are days you actually go out and charge for tree work.

 

Like you, I stick a long week in, but I don't work at the weekend apart from admin where necessary.

 

We don't specifically set 2 days a month aside for admin and pricing. Price up on the way home or maintain the gear on a wet or windy day.

 

The point I was making was that, IMO, its difficult not to go over the threshold.

 

e.g. if you do 151 days at £450 / day = £67,950

 

Don't forget to add in to the turnover hired in plant, bought in materials and firewood sales.

 

This won't work for those who are one man outfits employing assistants by the day.

 

I'm only talking about businesses with one full-time, on the books, employee.

[Mesterh]

As far as I know nearly all companies in my area dont charge VAT and I doubt many of them are close ish to the 68K.

[Tom D]

You must work for peanuts Dean, I have to say I haven't found that being registered has affected my work much, most of my work is domestic too. I tend to qoute including vat and if people query this I generally ask them why they would want to employ a non registered company, after all with the threshold at 68k they must be a pretty small concern, are they insured? qualified etc?

 

Harsh I know but being registered lends credibility, perhaps undeservedly, but you have to make the most of your situation.

 

If your turnover is say 60k say 30 k of this is wages for you and your groundie. That leaves 30k which you have paid vat on at 15%. Thats £4500 that you'd have saved over the year, you could keep your prices the same and enjoy the extra profit or lower your prices a little to help counteract the vat.

 

I still cant understand though, how a serious business, even a one man band with hired in groundies can stay under 68k.???

[Dean Lofthouse]

I do ok

 

I can earn as much profit staying a small outfit as I would if I had a crew going with less hassle, my groundy gets paid by the day if we work, I don't earn, he doesn't earn.

 

I probably average £1k a week for a three working day week.

 

I just run the outfit as efficiently as I can, I've got all the equipment I could want and it's all either as new or in tip top order and a 3.5 acre yard paid for... where am I going wrong?

[benedmonds]

The flat rate scheme works well for us, we charge 15% but only pay 9%, (unless that went down) . It reduces what we make on private but you make more from companies paying vat..

[Tom D]

Fair play Dean, if it works for you.

 

Makes me wonder where I'm going wrong, I'd be going backwards at 1k per week, I try to make at least 2. Not always easy though, did £2900 week before last and £350 last week:sad:

[Dean Lofthouse]

Thats the problem Tom, takings are not consistent, I calculate at the end of the year when you know how much you have taken for how many weeks/days worked.