Tax!

[Highland Forestry]

Ok, following on from reading about this in another thread...

Who thinks they pay too much tax, or indeed not enough tax??

 

I know that if you're not paying any tax then you're not earning any money....

 

My tax is taken care of as I have a nasty habit of spending all my money on new kit, vehicles, and some machinery soon I hope....

 

What kills me is the VAT and cashflow...

 

Just got my bill in today for my Feb-April vat return - £7200!!!!!!!!!!

 

To say I spat my coffee out reading the summary from the accountants is an understatement!

 

[Steve Bullman]

i put my vat money into a savings account as i get it so its not been a problem so far. my vat bill isnt anything like yours though!!

[TREELINE]

What kills me is the VAT and cashflow...

 

 

Cash flow agreed. VAT is just what you owe dude. Hard to not think of it as yours but its not - apparently.

[gibbon]

Tax isn't a big deal. I put away about 20% of all the money invoiced out after paroll has been done each month. The bill is always less than I have allowed.

 

Cashflow can be a big deal though. I'm always owed between £3000 and £15000 depending on the time of year. This March was a record with £22000 in outstading invoices.

[Highland Forestry]

Tax isn't a big deal. I put away about 20% of all the money invoiced out after paroll has been done each month. The bill is always less than I have allowed.

 

Cashflow can be a big deal though. I'm always owed between £3000 and £15000 depending on the time of year. This March was a record with £22000 in outstading invoices.

 

I can relate to that.... at the end of May I was owed a record 26k in outstanding invoices..

 

Cashflow is a nightmare.... even though I know I owe the VAT man because i've taken it in, whilst waiting for other invoices to be paid you have to use that money to keep the business afloat...

I could put the VAT away as I was paid it, but it would remove vital funds which the business needs to keep the boys paid every week.

[Treewarrior]

My other half deals with all that. I know she sorts it all out, tells me what we have and after all's been sorted what I am ALLOWED to spend!

 

Works for me and everyone's happy!

[evo0001]

Why not go on the flat rate scheme where you charge 15% give the vat man half and keep half the down side is that you cant claim back vat on kit and fuel. i think you can on big machinery now and again but if you claim back less than half each quarter then its worth looking in to but its capped at maximum earnings around £220000 pa to qualify

[combined tree services]

i find cashflow is the hardest part of running a busines , trying to put asside the tax and vat money makes it even worse , because guaranteed every month an outlay crops up that you were not expecting which means you have to dip into the tax or vat money , i have tried to over come this by making my payment terms strictly 14 days most LA's are happy to do so as the goverment have pushed them towards it due to the resession but im would be interested to hear what some of your payment terms are .

[Stephen Blair]

its a matter of organising yuor money, thats why i told you to work out what size of an overdraft you needed before you took on the work, have the paperwork set in place so when a customer pays late, they are paying your charges, have it all signed before you start the work, that is why commercial work is such a nightmare. the bank will have a bit of come and go, especially if you have the invoices in your hand, the vat man will want it there and then as will mr tax man. speak to the bank, most of the guys i know that chase commercial work have a deal with the bank, they pay your invoice straight away less a percentage and then they chase the money. this is why i do domestic work:001_smile:

[Johny Walker]

its a matter of organising yuor money, thats why i told you to work out what size of an overdraft you needed before you took on the work, have the paperwork set in place so when a customer pays late, they are paying your charges, have it all signed before you start the work, that is why commercial work is such a nightmare. the bank will have a bit of come and go, especially if you have the invoices in your hand, the vat man will want it there and then as will mr tax man. speak to the bank, most of the guys i know that chase commercial work have a deal with the bank, they pay your invoice straight away less a percentage and then they chase the money. this is why i do domestic work:001_smile:

 

invoice banking !!!!!!!!