going vat registered

[roseyweb]

Flat rate as well means it's not full 20% but I never really understood this scheme

[TimberCutterDartmoor]

I know Simon well and I am sure he is doing it well but

 

Turnover = profit, Discuss

 

£1 million turnover and £990,000 cost of sales

 

vs

 

£50,000 turnover and £15,000 cost of sales

 

Hmmm.

 

Turnover and profit are distant relatives imo...

[TimberCutterDartmoor]

Flat rate as well means it's not full 20% but I never really understood this scheme

 

Something along the lines of you charge 20% but only pay 10.5% to HMRC so keeping 9.5%. Downside is you can't claim anything under £2k back...

[Stephen Blair]

when I put my prices up a few years back on the domestic side it went 2 ways.

I had been VAT Reg for years but always done the domestic cheap and pretty much ran at a loss with them.

Some customers went off their heads and I soon realised they only used me because I was cheap and the other half said no bother.

What I would do is keep their jobs on the ' gap fill ' jobs list. So if I had been out with a squad and all the kit and was heading home at 4pm, it would be overtime for the boys, I'd made my money that day and the customer was happy.

If someone busts your head to do it immediately say no bother we are £4 a minute plus vat and haven't a clue when we will finish and I need paid straight Way, they soon look sheepish, then say if you are willing to wait until I have a gap I can do you a much better deal and explain.

[Al Cormack]

Something along the lines of you charge 20% but only pay 10.5% to HMRC so keeping 9.5%. Downside is you can't claim anything under £2k back...

 

 

Unless you are making purchases just under the 2k all the time it doesn't matter, the difference in percentage more than allows for the purchases.

 

I pay less vat on the flat rate scheme than on the normal scheme.

[Duncansimpson]

You don't need to increase your prices by 20% as you are claiming that back each month on purchases. Remember you can back claim vat on everything you have bought to date as long as you still have the invoice and still have the thing you purchased (ie tools etc but not materials)

[Steve Bullman]

You don't need to increase your prices by 20% as you are claiming that back each month on purchases.

It doesn't quite even out that way, unless of course your monthly expenditures equal your monthly turn over

[Kev Stephenson]

It doesn't quite even out that way, unless of course your monthly expenditures equal your monthly turn over

 

And if it does you have major issues as there is no VAT to claim on labour (PAYE wages) and profits

[Steve Bullman]

I don't see the point or really understand fully the flat rate scheme, but it seems to me theres no guarantee you are going to be better off with it from one month to the next. The standard scheme seems better, and if you have a decent accounts software then running a vat return is simple. Mine takes 20 seconds to complete!

[Al Cormack]

I don't see the point or really understand fully the flat rate scheme, but it seems to me theres no guarantee you are going to be better off with it from one month to the next. The standard scheme seems better, and if you have a decent accounts software then running a vat return is simple. Mine takes 20 seconds to complete!

 

 

I let my step mum aka book keeper sort it out! I know she had to set up a profit on vat account, as I wasn't paying as much vat as normal.

 

You can only be on a flat rate scheme upto a certain turnover. Went on it when the recession started and turnover dropped, but getting close to having to come off it again now.