Vat killing me!

[Billy]

Because if the VAT man decides they are not separate business, with separate equipment, they will go back 6 years, calculate the VAT due and bill you, they may well also charge you interest and penalties.

 

 

That and also with a combined turnover that must be 200k or more to necessitate 3 businesses...what's the point in avoiding it rediculous and when he gets caught his life will be ruined

[richy_B]

Because if the VAT man decides they are not separate business, with separate equipment, they will go back 6 years, calculate the VAT due and bill you, they may well also charge you interest and penalties.

 

They absolutely would charge interest and penalties. Its blatant breach of tax law. 15% is fairly standard on their fines - 6 years back VAT plus 15% and potentially disqualified as a director for 7 years = game over. Why risk it? It's just part of business in the UK.

[Daythe trees]

I've just gone ltd and VAT registered and timed my decision with the arrival of my new tr6, yard and a pending 7.5t. My plan being to work faster and smarter therefore lowering my prices to absorb VAT and be competitive. Oh and chasing every lead and scouring the net for more to avoid the lag. Seems to have worked for the last two weeks. No doubt be crying in a month!

[Rich Rule]

Why the need to lower prices?

 

Find the right customers and then charge more. Overall you can then get more work done in a timely manner and ultimately make more over the year.

[skyhuck]

Why the need to lower prices?

 

Find the right customers and then charge more. Overall you can then get more work done in a timely manner and ultimately make more over the year.

 

Lower than what?

 

If someone is charging a good high rate before going VAT registered then the 20% hike is going to be a tough sell, if its not maybe they were too cheap before.

 

I hear what people say about charging plenty and looking for the customers who will pay for high quality work, but there must be a ceiling price thats very hard to exceed, otherwise we would all just quadruple our rates and only work one day a week.

[Tom D]

Not sure about the legalities of split companies.. Sounds dodgy to me, it needs to be remembered that it's not a a case of right or wrong, it's a case of how an inspector interprets the rules. And these people have so much power, freezing bank accounts for example, that it's not a risk worth taking.

 

I'm surprised how many people manage to stay under the vat threshold (without doing a lot of cash). The threshold is 83000, that's only £318 per working day of the year..

[Stephen Blair]

I'm well below it now, I only stay Vat for buying kit.

I'm thinking on se registering tbh as fuel is down in price and my kit is all in good working order.

Also the old van and Gloria was much less hassle tbh:)

[Matthew Storrs]

All relevant- someone working on their own- no staff is doing well to be near the Vat limit, even if you have a load of machinery etc- its staff thats the killer:laugh1:

[Tom D]

Its pretty hard to do tree work with no staff. you need a subby or an employee surely?

[Stephen Blair]

Depends on the size of the trees, for domestic garden conny bashing and cherry tree pruning, there's no need for staff, especially if you have a micro chipper!