VAT Registration

[matthawh1966]

You must get people wanting to pay cash to lose the vat.

[TimberCutterDartmoor]

A good tip is to put away on a monthly basis a fixed amount into an ISA account and use that to pay the vat; it's gaining interest and you won't be scrabbling every quarter.

 

+1; essential imo, don't go spending it!

 

I went vat registered by choice a few years ago now, and have absolutely no regrets at all. I find the benefits outweigh the disadvantages.

 

[Hodge]

don't drop your prices to win the job, your taking money out your own pocket. If people don't want to pay the vat, walk. people who want it done on the cheap are not my target client base. If you want to offer a professional, efficient service you need the right guys and the tools, you need to find the clients who understand this.

 

 

And what if you can't find clients like that? People don't necessarily want a cheap job they just want a fair price and if as in my case only 2 out of 6 or 7 competitors are vat reg it makes things hard. I looked into as I kept hitting the limit and when I worked out what I could claim back each month it was in reality very little, unless your hired in labour is vat reg. Monthly fuel bill didn't generate much and unless you but new machines then you don't get much back.

 

 

Hodge

[Steve Bullman]

Its very hard not dipping into your vat fund that you should be putting aside, but as said, its crucial

[Matthew Storrs]

Iv been considering it for the last year, I mainly work on my own so not at the limit but getting more and more work and thus probably going to take someone on. As soon as you have wages to pay you can't be making do with crap kit as the downtime is too expensive so getting the VAT back on machinery purchases not to mention day to day running cost is a no brainer.

Most of my customers are farmers anyway.

[Ian C]

You must get people wanting to pay cash to lose the vat.

 

Yes I get asked all the time I just day its same price end of, they dont get vat off at the petrol station for cash so I don't either.

[Inoff the Red]

Check to see if you are eligible for flat rate vat scheme. You don't have to collect all the vat receipts (I still do though!) and is much simpler to run.

 

Although the flat rate scheme may appear to be an attractive option, i have rarely found anyone that actually benefits from it. As a matter of interest what scheme rate are you on?

 

As for the collection of vat receipts, you may not need them for your vat return but you certainly will need them for the purposes of doing your accounts/tax return. Regardless of whether you are self employed or operating through a limited company/partnership or LLP you are obliged to keep a record of all purchases and expenses and retain invoices and receipts.

 

If you had an HMRC inspection and could not provide evidence to show that purchases/expenses were business related (as opposed to being personal expenses) you could have a major problem.

[Al Cormack]

Although the flat rate scheme may appear to be an attractive option, i have rarely found anyone that actually benefits from it. As a matter of interest what scheme rate are you on?

 

As for the collection of vat receipts, you may not need them for your vat return but you certainly will need them for the purposes of doing your accounts/tax return. Regardless of whether you are self employed or operating through a limited company/partnership or LLP you are obliged to keep a record of all purchases and expenses and retain invoices and receipts.

 

If you had an HMRC inspection and could not provide evidence to show that purchases/expenses were business related (as opposed to being personal expenses) you could have a major problem.

 

I'm using the 10.5% rate for forestry.

My vat payment each quarter is always less than if I had been on the normal scheme.

Take your point about receipts. I was only talking about needing to add them all up for doing the return.

For capital asset purchases you can still claim back the vat if it is £2000 inc vat or more.

[skyhuck]

I'm using the 10.5% rate for forestry.

My vat payment each quarter is always less than if I had been on the normal scheme.

Take your point about receipts. I was only talking about needing to add them all up for doing the return.

For capital asset purchases you can still claim back the vat if it is £2000 inc vat or more.

 

My accountant reckons the flat rate scheme saves me around £800 per year, but the big plus in my book is that paying a % of turnover is simple and you can't really get it wrong, so you won't get a VAT inspection and find you owe them money.

[ArthurBottlesworth]

I think the world is going the other way

Had to sort out my mums house and everyone wanted cash

Including

Skip hire

Locksmith

Plumber

Guy who did enviromental check

Contract cleaners

Antique dealer

Carpet layers

Gardener etc etc

It was a revelation to me, These were all kosher businesses but they had all moved over to cash --- I think its a reaction to MP's expenses ......

Came away wondering if I was being stupid doing everything through the books .........