Vat killing me!

[DeltaBravo]

Oh wow, I can relate to this post!! BUT as you mentioned, go for more commercial work and that should help. That's what I did anyway.

[Ty Korrigan]

When I first started out on my own in 2003 I asked advice from my then accountant, who suggested two businesses, one non VAT sole trader for service, and another, Ltd, VAT reg business for sales.

 

Within 18 months I had a visit from the VAT man (actually a lady) who was not impressed. But she was helpful and fair.

 

The result was the integration into one VAT reg company and a change of accountant.

 

Here across 'La Manche' many tree companies run a landscape/grounds care offshoot as a separate entity.

On grounds care, clients may benefit from a 50% tax credit up to 1800euros per tax year and a reduced rate of vat 10%

Perfectly legal.

 

I had considered registering a holding company in Morocco which owned all the kit and billing the French limited company for the hire...

Company tax is VERY much lower over there but alas...

I have a business partner so a firm NON to that idea.

Ty

Edited April 12, 2016 by Ty Korrigan

[Woodworks]

This is topical for me at the moment as i'm tetering around on the Vat limit at the mo- I think i prefer the idea of going on holiday more and earning less to save myself the hassle:laugh1:

 

Do you think that being Not VAT regeistered really prevents commercial work?- I seem to get a fair bit of council/national park and the like and don't think that not being registered prevents this, They are more one off jobs though rather than a long term contract though...

 

Go on Holiday Matt

 

Wish we hadn't done it. It's OK on the firewood but killed our processing work

[DeltaBravo]

Go on Holiday Matt

 

Wish we hadn't done it. It's OK on the firewood but killed our processing work

Hmm, yeah, that is an option too - I suppose it would depend on if you'd like to expand / hire more staff etc, in which case seeking more commercial work would be worth it by the end of the financial year.

[Mark Bolam]

Remember you can keep your prices the same for domestic, but they include the VAT.

A £480 job still costs Mrs. Miggins £480, but it's actually £400 + VAT.

Yes, you're down on what you would have earned, but remember you can now reclaim VAT on nearly everything you have to buy for the business, and you can back-date some of it.

Don't ever try playing silly buggers with the VAT people though.

They literally have more powers than the police and will tear you a new one without anaesthetic if you even look at them funny.

[TIMON]

It's called VAT seperation and is illegal if you are dividing a business supplying the same product or service under different names primarily for the purpose of avoiding VAT. Happens in most trades I expect though but very easy for them to see, trace and fine/prosecute for.

 

Perfectly legal if you deliver different services but if it's all arboriculture, delivered by the same workers, using the same equipment, wearing the same gear, etc, etc you are 100% illegal. If you use yourself and you tipper for waste disposal you could call it a different business, if you used your tractor for contract meadow work and so on.

 

You have to accept VAT is part of business growth. Everyone bar one man bands will hit the threshold in a year. It's only £332 turnover a day based 250 days a year.

 

 

A climber, 2nd climber/groundie plus tipper and chipper, climbing kit, saws, rigging kit. Insurance. Fuel. Advertising etc.... For £332 a day?

 

Not much change left out of that at the end of the day.

 

There is also the fact that people can also see that a firm charging/paying VAT is a sign of an honest, busy firm. Any half decent salesperson can work that into the quoting discussion.

[Aaron Sydney]

Somehow the public needs to be informed that they should only use legitimate firms, unfortunately it would be too expensive to do, and also most who pay vat are legitimate !

[aiden]

Aaron i dont think all non vat companies are not lergit, i m not vat registered but still work to a very high standard and i am sure i am not the only non vat comapany to work to high standards

[hamdogg]

Aaron i dont think all non vat companies are not lergit, i m not vat registered but still work to a very high standard and i am sure i am not the only non vat comapany to work to high standards

 

 

Completely agree mate, what a load of tuff!! So only VAT company's should be used?? That what you saying Aaron?

[richy_B]

Aaron i dont think all non vat companies are not lergit, i m not vat registered but still work to a very high standard and i am sure i am not the only non vat comapany to work to high standards

 

I agree, no VAT doesn't mean it's suspect. It does, as mentioned earlier, give a bit more confidence. Whether that consWumer confidence is worth the costs VAT brings is of course personal opinion .

 

For me, when making reasonable sized spends of £1k+ (trades work, used vehicle/machinery, etc) I check business status and then a 10 second glance at the companies house file, run their VAT number and check the address is real on Google Street view. This doesn't provide any guarantees but it seems due diligence and a minute to do. May sound a bit anal but I've ( or atleast feel) dodged a few bullets because of it.

Edited April 12, 2016 by richy_B