Clean It Up
UK Window Cleaning Forum => Window Cleaning Forum => Topic started by: Neil Gornall on July 30, 2012, 08:08:16 am
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For a few years I stayed under the VAT threshold on purpose to avoid having to pay it, but then decided if I was to grow the business I had no choice.
For anyone in the same position I would say consider it very carefully. If like me most of your work is domestic, ask yourself if you can pass on the VAT to your customers or will you have to absorb it.
I doubt you will be able to pass it on to many if any at all, the competition is so great now that to tell Mrs Jones her £10 cleaning bill will now have to go up to £12 won’t go down very well and she will soon look elsewhere for a cheaper deal. Your competition will clean up. (excuse the pun)
Commercial work is no problem as they will accept it without hesitation but can you afford to take a 20% hit on all your other work?
That quarterly VAT bill is a killer.
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Neil
Why didn't you go on the flat rate scheme that way you only pay 10%, depending on your spread of work between domestic and commercial, the commercial is charged 20% which can subsided the domestic
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I dont know you family circumstances, but you could give the business to your wife, or partner, and start a seperate business, even with a similar name. On one of our three busnesses, we did this, and VAT man approved it, as she was not a partner or director at the time. Just as if you sold the business to a non vat registered business, if it was under threashold, you would not have to pay vat
idealrob
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I dont know you family circumstances, but you could give the business to your wife, or partner, and start a seperate business, even with a similar name. On one of our three busnesses, we did this, and VAT man approved it, as she was not a partner or director at the time. Just as if you sold the business to a non vat registered business, if it was under threashold, you would not have to pay vat
idealrob
My accountant has suggested something similair(more money for him).I have decided to get a few cookery books instead ;)
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I'm flat rate and in my 2nd year on the scheme,
We raise an invoice at 20% and pay the vat man 12% so pocket 8%. We don't claim back any vat unless it is on a purchase of £2000 or more.
Hope that helps,
Dean.
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I'm flat rate and in my 2nd year on the scheme,
We raise an invoice at 20% and pay the vat man 12% so pocket 8%. We don't claim back any vat unless it is on a purchase of £2000 or more.
Hope that helps,
Dean.
so you actually earn with vat that way
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Yes mate,
Good isn't it.
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The3 problem with window cleaning as its mostly labor and it does not produce any input vat to offset the vat we charge. VAT is great in retail.
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Yes mate,
Good isn't it.
u make something very feared into fun elaborate further :)
Neil could most likly need some advice seems he aint having as much fun as you are!
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Yes mate,
Good isn't it.
u make something very feared into fun elaborate further :)
Neil could most likly need some advice seems he aint having as much fun as you are!
Haha,
No, no. I certainly aren't having fun.
I'm actually quite distressed by it if I'm honest. :-*
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Neil
Why didn't you go on the flat rate scheme that way you only pay 10%, depending on your spread of work between domestic and commercial, the commercial is charged 20% which can subsided the domestic
Sorry guys I misled you slightly, I used the 20% figure as that is the standard we charge out at but I am also on the flat rate scheme although not 10%, I wish we were as then we might at least break even.
My rate is 12%, but the point I was making is the same. with having so much domestic compared to commercial we certainly don't make money from the scheme. The problem is compounded each time I buy anything knowing I am paying the VAT but cant claim it back.
Personally I think the threshold should be about £5000, that way everyone would pay except those earning pocket money such as retired folk. at least then we would all be on an even playing field.
Pure HYDRO, if you are on 10% (please can you confirm that) then I assume that is agreed by the VAT man so therefore I am going to see if I can get mine reduced.
When I joined the scheme there was a massive list of occupations to choose from but window cleaning was not on it, I had to choose something similar (or rather my accountant did)
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how come you aint claiming the vat back often? or only on large purchases i think do know the answer!, but might as well hear it from the horses mouth!, since you know the realism of being vat reged
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how come you aint claiming the vat back often? or only on large purchases i think do know the answer!, but might as well hear it from the horses mouth!, since you know the realism of being vat reged
When you are on the flat rate scheme you can only claim VAT back on any purchase above 2k.
Which pretty much rules out everything other than your van.
So basically you gain a bit on jobs you charge but lose on jobs you don't and purchases.
The reality is, unless you have a high % of comercial jobs VAT will cost you a good chunk of your profit every 3 months. >:(
So if you are intent on growing your business be sure to factor it in otherwise it will bite you
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I'm vat reg and find it works for me as I'm on cash accounting and only pay vat on the paid invoices. I claim vat back on fuel and anything to do with work. It's nothing outta my pocket as I price the jobs up to what I want then just add the vat on which we pay 3 monthly bollox when u gotta send them a nice many thousands a quater sick really. Don't think it would work being domestic wouldn't know why u would go vat when u get cash mostly and don't have to declare .
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I'm vat reg and find it works for me as I'm on cash accounting and only pay vat on the paid invoices. I claim vat back on fuel and anything to do with work. It's nothing outta my pocket as I price the jobs up to what I want then just add the vat on which we pay 3 monthly bollox when u gotta send them a nice many thousands a quater sick really. Don't think it would work being domestic wouldn't know why u would go vat when u get cash mostly and don't have to declare .
Err that will be due to the fact I run a legitimate and honest company.
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flat rate for window cleaning is 12% - if you are paying 16% then you are paying too much - change it as quick as you can cos you are paying too much.
Dean you are not making 8% by charging 20% and paying the VAT man 12% because you are effectively paying VAT on VAT.
For example if you are charging a customer £100 he then pays you £120 inc £20 for the 20% VAT. At the end of the quarter you pay the vat man 12% of the 20 % VAT inclusive turnover,
so for that £100 job you pay the VAT man 12% of £120 not 12% of £100.
You are actually paying £14.40 vat on that job and not £12.
It seems like a better deal than it is and i spose is a clever bit of marketing by HMRC.
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Neil
Why didn't you go on the flat rate scheme that way you only pay 10%, depending on your spread of work between domestic and commercial, the commercial is charged 20% which can subsided the domestic
Pure HYDRO, if you are on 10% (please can you confirm that) then I assume that is agreed buy the VAT man so therefore I am going to see if I can get mine reduced.
When I joined the scheme there was a massive list of occupations to choose from but window cleaning was not on it, I had to choose something similar (or rather my accountant did)
Hi Neil
I am not vat registred yet and was quoting some old figures from last year I believe, I have a different game plan to tackle the vat problem.
Before I reach the vat limit I will give a franchise package to a employee and charge him/her 25% for the first 5 years, then 20% per year after that, if they want to or go over the vat limit then they have to register and pay it, but my franchising company will not need to go vat registered until I get to 5 or 6 franchisees.
The main cleaning company will go vat registred at some time, but the company will only cater for commercial clients so this will not be a problem, all domestic customers will be passed onto the franchisees.
I had a meeting with my accountant yesterday and outlined my plans, he didn't flag anything up.
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Neil
Why didn't you go on the flat rate scheme that way you only pay 10%, depending on your spread of work between domestic and commercial, the commercial is charged 20% which can subsided the domestic
Pure HYDRO, if you are on 10% (please can you confirm that) then I assume that is agreed buy the VAT man so therefore I am going to see if I can get mine reduced.
When I joined the scheme there was a massive list of occupations to choose from but window cleaning was not on it, I had to choose something similar (or rather my accountant did)
Hi Neil
I am not vat registred yet and was quoting some old figures from last year I believe, I have a different game plan to tackle the vat problem.
Before I reach the vat limit I will give a franchise package to a employee and charge him/her 25% for the first 5 years, then 20% per year after that, if they want to or go over the vat limit then they have to register and pay it, but my franchising company will not need to go vat registered until I get to 5 or 6 franchisees.
The main cleaning company will go vat registred at some time, but the company will only cater for commercial clients so this will not be a problem, all domestic customers will be passed onto the franchisees.
I had a meeting with my accountant yesterday and outlined my plans, he didn't flag anything up.
you better get a move on then, ;) ;D ;D ;D ;D ;D
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why? am I in a race or something?
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why? am I in a race or something?
start getting some more work in be a good help to yourself, ;) ;D
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why? am I in a race or something?
start getting some more work in be a good help to yourself, ;) ;D
thank you for the advice, I got 11 new jobs this week from 9000 leaflets, ordered another 15000 for next friday and then 15000 new ones every 2 to 3 weeks for the time being.
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really good that,but how you going to cope with it ???when i your words quote "i aint going to be able to walk for 6months" and i got a worker who cant drive.
cant wait for the reply mr billy bull ................ :P
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Must have nearly three days work now ::)
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Must have nearly three days work now ::)
nice hols mate 8) 8) 8) 8)
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Only five days :(
........ but I go abroad every six weeks normally. ;)
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really good that,but how you going to cope with it ???when i your words quote "i aint going to be able to walk for 6months" and i got a worker who cant drive.
cant wait for the reply mr billy bull ................ :P
Last year I had the same operation and I spent 1 week in hospital, 4 days after I had left I was driving my van and the staff I had working did the cleaning.
This year hopefully things will be different, my main guy does not have a driving licence, but someone who use to work for me is looking for a job and he does have a driving licence, I also have a canvasser who wants a proper job and he also has a driving licence, I have taken him out for 1 day cleaning to see if he likes the job and he has said he does.
but if its goes pear shaped and I have nobody who works for me who can drive, well I will have 2 weeks off, one week in hospital and the other at home, then I will drive while wesley cleans, at the moment I am leaving most of the cleaning to him to get him upto speed as fast as possible.
Frank you know, that physical difficulties is not the end of the world, I have been door knocking in 1985, 3 days after coming out of The Woodlands and still in a plastercast, I also was cleaning carpets.
Last year I had a fusion on my ankle, in the operation the break every bone in the ankle and reset and insert screws and plates.
2 days later they want you walking and it hurts, it still hurts and it over 12 months since they did the operation, I will carry on if needed.
You think I am bull poopting, but believe me I am not, you don't like me and what can I say, I am arrogrant and I do my own thing which others cannot understand or believe.
I have aquired this arrogrance over the years, I don't like to lose and I never will let anything or anybody beat me, I like to push the boundarys and when I pass them I like to "brag" about them, because hopefully someone who is unsure they can make it will be encouraged to keep trying and not give up.
At the end of the day, does it really matter, not a bit, I am very lucky and I know it, I have seem better people suffer more than I or you can dream of, and they are not around to "bullpoop" what they want to do.
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some reply i give you that.
stopped reading it after the second sentance. ;D ;D ;D
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some reply i give you that.
stopped reading it after the second sentance. ;D ;D ;D
Feel better now
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Must have nearly three days work now ::)
Who are you?
You have different names on different forums
Will the real dickhead please step forward
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Must have nearly three days work now ::)
Who are you?
You have different names on different forums
Will the real dickhead please step forward
launage please >:(