Think about vat when your actual(not declared) turnover is getting to £100k or more,and then flat rate it. You have 2 choices here and thats, be a dilgent unpaid tax collector for the treasury or a shrewd businman that realises the current vat threshold is too low and stifling your efforts to expand and employ and thereby handicapping your true worth to the economy.Many,many accountants think they work for the treasury,find one that works for you.How are you supposed to pay the vat due when you havn`t even been paid yourself?,its a full time job nearly just sorting it out. Try de-registering if you have a downturn/lose a few employees etc.,another nightmare. If you look closely at your money you`ll find theres probably only a couple of days a week where you earn money you get to keep,well make that maybe one day if you vat register at £70k. If this dilemma ever comes my way i`ll sell and compact. Vat register and you WILL know what cash-flow problems are all about. if you are at this dilemma then do whatever is neccesary to avoid vat,use different umbrellas to keep individual turnovers down,consolidate it if you must when you get to £150k turnover and then you are in the ballpark for vat.
I talk to accountants informally,just go and ask one what they think of the threshold at 70k and your next extra pound turnover gives you a £14k liability,alright £8.4k at flat rate. A 20 percent increase of cost to customers because of vat !,your customers are waiting to be hoovered up by the non vat man. No problem at all some will tell you,in fact some will say double your prices and if you dont lose half of them you are better off.Real world says "NO".
Lets say you were able to hide turnover so that when you did register you were not going to be worse off. So 68k appx. turnover becomes 84 k appx. turnover following year and you register. Basically you should not be worse off on paper ,though the bookeeping bill has just gone up 5k a year or do it yourself. Very soon you cannot find time to clean windows,everything you have strived for is in the hands of others.Yet all problems come to you,so delegate but then that guy wants a pay rise. You are now trapped in red tape and bureacracy,your part-time book-keeper is on 26 weeks maternity leave. How can the vat man want £4837 when i only have £937 in the bank and 2 van lease payments due, and he is going to fine me if its not paid this week? All this is manageable but you need to leap to £150k turnover to justify putting up with it and seeing something left at the end,maybe.
Now some people may revel in this and enjoy the local chamber of commerce meetings etc but it wouldn`t be for me and it requires dedication and levels of energy i don`t currently have,which is why i am typing this and having a lazy morning though at least i am feeling a bit guilty about it. Time to get the slippers off and go do the £48 scheduled today or tommorrow,push fridays £112 to next week for synchronisation purposes. Thats how i will justify it !
