[Ken_Long]

Hi, long time, no post. Quick query about being registered for vat.
Last week a good friend of mine asked me if I would be interested in taking on his window cleaning round. I've got some spare capacity so said sure thing. Then today I was asked by another friend whether I would be interested in some garden/grounds maintenance work (about one day a week, contract for a year, nicely priced, rolls on) and I said yes. Totalling up the value of all these bits heads up towards £90k a year.
I may need to get someone to help out, but if I understand correctly VAT eligibility is reflected in the gross income, not net, yes?
If I become vat registered does that mean domestic customers have to pay 20% more (or do I reduce their price so with VAT it stays the same?)
What have you done if you've had to register for vat? Pros and cons? Any sensible input appreciated.

[Ggh]

Unless you’re gonna go big, don’t bother. Price your work ridiculously high and stay under the threshold.

[Ken_Long]

Sorry, I don't really understand what you mean?

[Splash & dash]

What he’s saying g is either be on 80k or if you go over you want to get to 100k plus asap . If working on your own you will be better off and earn more staying under the vat threshold, if you are going to employ then try and expand rapidly

[Ascjim]

Yes, there is no point going over unless you go a lot over.

You have to pay 20% on ALL your profit
More time / money is needed for book keeping
Plus, the HMRC are on you when you go VAT reg

[KS Cleaning]

Grounds maintenance and window cleaning would be two separate businesses, so no need to be VAT registered…..unless of course one of them was turning over 85k

[Splash & dash]

Grounds maintenance and window cleaning would be two separate businesses, so no need to be VAT registered…..unless of course one of them was turning over 85k

You would have to have separate vehicles etc or they will class it as tax evasion

[Splash & dash]

Have a read of this it explains it quite well

[Smudger]

Yes, there is no point going over unless you go a lot over.

You have to pay 20% on ALL your profit
More time / money is needed for book keeping
Plus, the HMRC are on you when you go VAT reg

you mean income

[Smudger]

you need to remember the 85k is rolling ie look at your turnover from last jan to this - so if your getting near you need to keep an eye on where you are

Our line of biz is bad for VAT - we don't have much to offset it - I hire a lot of access machines so I do now get to claim a fair bit back
VAT (IMO) is unfair - its based on turnover not profit or expenses and can be a bitter pill to swallow.

if you go for it - try to get more commercial works in on the run up as you can VAT them 20% ( your first year in VAT may qualify you for a lower rate )
My domestic customers were put up 10%  for small works I incorporate the VAT in the price  - bespoke works ie. roof cleans - soffit, fascia guttering  etc.. are quoted + VAT
All commercial stuff they expect VAT on top anyway

you have to weigh up what you want - if its just a tickle and it puts you a couple of k's over - forget it  - if your going big then you will have to bit the bullet.

Ref: gardening - I think you would be fine if your wife/member of family "brought it" and "ran it" because you didn't start it - you've taken it over - but it will require separate accounts/computer/phone line and vehicle

[Splash & dash]

you need to remember the 85k is rolling ie look at your turnover from last jan to this - so if your getting near you need to keep an eye on where you are

Our line of biz is bad for VAT - we don't have much to offset it - I hire a lot of access machines so I do now get to claim a fair bit back
VAT (IMO) is unfair - its based on turnover not profit or expenses and can be a bitter pill to swallow.

if you go for it - try to get more commercial works in on the run up as you can VAT them 20% ( your first year in VAT may qualify you for a lower rate )
My domestic customers were put up 10%  for small works I incorporate the VAT in the price  - bespoke works ie. roof cleans - soffit, fascia guttering  etc.. are quoted + VAT
All commercial stuff they expect VAT on top anyway

you have to weigh up what you want - if its just a tickle and it puts you a couple of k's over - forget it  - if your going big then you will have to bit the bullet.

Ref: gardening - I think you would be fine if your wife/member of family "brought it" and "ran it" because you didn't start it - you've taken it over - but it will require separate accounts/computer/phone line and vehicle

And according to the above post different addresses as well

[Smudger]

Ideally but not a given

[Splash & dash]

Ideally but not a given

A lot of this is a grey area and open to discussion HMRC can say yes or no but from my perspective it’s not worth the risks involved would rather register and pay the VAT or stay under rather than take the risk of action and heavy fines later

[Smudger]

Are you over splash or a flyer under the limit?

[Splash & dash]

Are you over splash or a flyer under the limit?

VAT registered at the moment but down sizing and selling off loads of work going to semi retire soon

[Jonny 87]

Are you over splash or a flyer under the limit?

VAT registered at the moment but down sizing and selling off loads of work going to semi retire soon

Good on you splash.

Sounds like you’ve done well.

All the best. 

[Perfect Windows]

Hi, long time, no post. Quick query about being registered for vat.
Last week a good friend of mine asked me if I would be interested in taking on his window cleaning round. I've got some spare capacity so said sure thing. Then today I was asked by another friend whether I would be interested in some garden/grounds maintenance work (about one day a week, contract for a year, nicely priced, rolls on) and I said yes. Totalling up the value of all these bits heads up towards £90k a year.
I may need to get someone to help out, but if I understand correctly VAT eligibility is reflected in the gross income, not net, yes?
If I become vat registered does that mean domestic customers have to pay 20% more (or do I reduce their price so with VAT it stays the same?)
What have you done if you've had to register for vat? Pros and cons? Any sensible input appreciated.

Lets assume you go onto flat rate VAT (simple, total admin per quarter around 15 minutes). Under that you'll pay 12% of your turnover to HMRC.

At £84,999, you're not VAT registered and you pay zero.
At £85,000, you're VAT registered and you pay 10,200, giving you a pay cut of £10,199
at £96,589, you pay £11,590, leaving you with £84,999, back where you started.

You could put up all your customers by 20% but it might not go down well.

In short, unless you can get through the £96k barrier very quickly, don't bother.

Vin

[Jack Judd]

Completely agree I went VAT registered 2 years ago.  It takes a while to get a head around it. There are avantages,  VAT back on purchases etc but as someone said to me you are a tax collector for HMRC with a quarterly VAT return.  Only worth going over if you go well above it.  So expand, put all your prices up 10%.  If you are getting close, keep a very close eye on it and sort your business out for a year, so you are ready the next year to go for it.  Dont dribble over the line as you will be worse off.  £100K +, you can start to make it work in your favour.

[Tez]

Personally, I think the VAT threshold in this day and age is far too low. It hits the small businesses who are the backbone of our economy and is a cash cow for our chancellor.

[Simon Trapani]

Personally, I think the VAT threshold in this day and age is far too low. It hits the small businesses who are the backbone of our economy and is a cash cow for our chancellor.

It’s been at 85k since 2017 & is frozen at that until 2026. So nine years. An absolute joke.

[dazmond]

Are you over splash or a flyer under the limit?

VAT registered at the moment but down sizing and selling off loads of work going to semi retire soon

You ve been saying that for years!

[Splash & dash]

Are you over splash or a flyer under the limit?

VAT registered at the moment but down sizing and selling off loads of work going to semi retire soon

You ve been saying that for years!

Yes I know it all came to a grinding halt with covid  couldn’t organise the change over then but will all be in place by spring next year sold off over 2,000 jobs already so it’s getting there slowly

[Perfect Windows]

Personally, I think the VAT threshold in this day and age is far too low. It hits the small businesses who are the backbone of our economy and is a cash cow for our chancellor.

I disagree. It should be far lower. About £30k so really tiny businesses aren't hit. It'd also make the hit when you do go through it far more bearable and everyone bar the smallest business would be on an even footing.

It's been calculated that move to a £30k limit and a drop to a 17.5% rate would be neutral. Get rid of all the exemptions while you're at it and you'd be down to about 8%.

Vin

[jay moley]

I'm £5k away from it.

What kind of turnover makes it doable to be VAT registered?

Can't you pay a flat rate (not that I understand it)? Is that better?

If you decide to stay below is the idea to increase your prices so you have less work to do to earn the same money?