Clean It Up
UK Window Cleaning Forum => Window Cleaning Forum => Topic started by: 8weekly on January 18, 2016, 06:44:20 pm
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I'm just about to hit the VAT threshold since starting as a limited company and have begun telling customers that their next clean will either include a 20% hit for VAT or bringing the older customers into line with the prices that new customers get. So far I had one old lady that looked very sour on the news in spite of the fact that hers is only rising from £25 to £27 and an old bloke says he'll have to think about it after getting £15 to £18 - the full 20%. I expect to lose some, but the alternative is to pay it myself. :'(
It's quite a cruel tax really at this level. At an arbitrary and pretty low level it suddenly makes business A look expensive compared to business B.
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I'm just about to hit the VAT threshold since starting as a limited company and have begun telling customers that their next clean will either include a 20% hit for VAT or bringing the older customers into line with the prices that new customers get. So far I had one old lady that looked very sour on the news in spite of the fact that hers is only rising from £25 to £27 and an old bloke says he'll have to think about it after getting £15 to £18 - the full 20%. I expect to lose some, but the alternative is to pay it myself. :'(
It's quite a cruel tax really at this level. At an arbitrary and pretty low level it suddenly makes business A look expensive compared to business B.
You could always cut the price on certain jobs so to absorb the VAT so to speak if you wanted. Either way you will find restistant from domestic customers having to pay VAT to get their windows cleaned anyway.
Good luck with that ::)roll
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Are you a one man band?
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Are you a one man band?
No, two vans. One man in each.
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U will feel it wen u vat reg ........ It's great that u get the vat back on everything but it's a killer every 3 months wen u got to pay it.
If u don't add it on and absorb it u will feel a massive hit on wot ur used to
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Problem solved as just franchise the second van out ;D
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Nightmare is Vat , but it means your doing well .
I'm no where near that threshold and I think I would always stay beneath it if I ever got close .
But I am a long way short of earning VAT Threshold , so no worries
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U will feel it wen u vat reg ........ It's great that u get the vat back on everything but it's a killer every 3 months wen u got to pay it.
If u don't add it on and absorb it u will feel a massive hit on wot ur used to
I know. It's a scary thought. It will be the flat rate scheme and new prices have it priced in, but it's not going to be nice. I will get the vat back on the new van at least. :-\
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U will feel it wen u vat reg ........ It's great that u get the vat back on everything but it's a killer every 3 months wen u got to pay it.
If u don't add it on and absorb it u will feel a massive hit on wot ur used to
I know. It's a scary thought. It will be the flat rate scheme and new prices have it priced in, but it's not going to be nice. I will get the vat back on the new van at least. :-\
So how come you got to the threashold with only two of you working?
Does most of you turnover come from large commercial contracts then?
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U will feel it wen u vat reg ........ It's great that u get the vat back on everything but it's a killer every 3 months wen u got to pay it.
If u don't add it on and absorb it u will feel a massive hit on wot ur used to
I know. It's a scary thought. It will be the flat rate scheme and new prices have it priced in, but it's not going to be nice. I will get the vat back on the new van at least. :-\
So how come you got to the threashold with only two of you working?
Does most of you turnover come from large commercial contracts then?
It's only £854 a man per week over 48 weeks. It's really not that hard. According to my sums anyway.
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U will feel it wen u vat reg ........ It's great that u get the vat back on everything but it's a killer every 3 months wen u got to pay it.
If u don't add it on and absorb it u will feel a massive hit on wot ur used to
I know. It's a scary thought. It will be the flat rate scheme and new prices have it priced in, but it's not going to be nice. I will get the vat back on the new van at least. :-\
So how come you got to the threashold with only two of you working?
Does most of you turnover come from large commercial contracts then?
It's only £854 a man per week over 48 weeks. It's really not that hard. According to my sums anyway.
Best you speak with your accountant for advice
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U will feel it wen u vat reg ........ It's great that u get the vat back on everything but it's a killer every 3 months wen u got to pay it.
If u don't add it on and absorb it u will feel a massive hit on wot ur used to
I know. It's a scary thought. It will be the flat rate scheme and new prices have it priced in, but it's not going to be nice. I will get the vat back on the new van at least. :-\
So how come you got to the threashold with only two of you working?
Does most of you turnover come from large commercial contracts then?
It's only £854 a man per week over 48 weeks. It's really not that hard. According to my sums anyway.
Best you speak with your accountant for advice
What kind of advice?
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Problem solved as just franchise the second van out ;D
Exactly
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I'm just about to hit the VAT threshold since starting as a limited company and have begun telling customers that their next clean will either include a 20% hit for VAT or bringing the older customers into line with the prices that new customers get. So far I had one old lady that looked very sour on the news in spite of the fact that hers is only rising from £25 to £27 and an old bloke says he'll have to think about it after getting £15 to £18 - the full 20%. I expect to lose some, but the alternative is to pay it myself. :'(
It's quite a cruel tax really at this level. At an arbitrary and pretty low level it suddenly makes business A look expensive compared to business B.
I agree. Its like being penalised for doing well and providing work for other people. I spoke to an accountant and he can't believe the VAT limit is under £100k.
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I'm just about to hit the VAT threshold since starting as a limited company and have begun telling customers that their next clean will either include a 20% hit for VAT or bringing the older customers into line with the prices that new customers get. So far I had one old lady that looked very sour on the news in spite of the fact that hers is only rising from £25 to £27 and an old bloke says he'll have to think about it after getting £15 to £18 - the full 20%. I expect to lose some, but the alternative is to pay it myself. :'(
It's quite a cruel tax really at this level. At an arbitrary and pretty low level it suddenly makes business A look expensive compared to business B.
I agree. Its like being penalised for doing well and providing work for other people. I spoke to an accountant and he can't believe the VAT limit is under £100k.
Here in Ireland the VAT threshold is 37500 euros.
John
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I don't know why you just didn't franchise some out blimey think man thiiiiiink,lol
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Just because your going into vat threshold you can't make your customer s pay your vat, if you do that then your gonna be back under vat threshold because you will lose so many customers by increasing your prices,
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You can knock the VAT off but it defeats the object in the first placeyour taking a pay cut to go VAT. It all depends on the work you do some people won't bat an eyelid some will get someone else. When some people know your VAT registered there reaction might be he doesn't need little old me he must have bigger fish to fry,some will be impressed your doing well. Good idea to sound them out first you'll know 18 months before you go over.
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Just because your going into vat threshold you can't make your customer s pay your vat, if you do that then your gonna be back under vat threshold because you will lose so many customers by increasing your prices,
It's not my VAT. The idea of VAT is that the customer pays it, not the service provider.
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Telling your custys their prices are going up 20% because you're now vat registered is daft , I get you been honest and having to increase prices but they will think you're earning far to much money for a windy and are surely more likely to dump you .
I would be selling some work off surely better to stay slightly under than the headache and cost of been over .
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Telling your custys their prices are going up 20% because you're now vat registered is daft , I get you been honest and having to increase prices but they will think you're earning far to much money for a windy and are surely more likely to dump you .
I would be selling some work off surely better to stay slightly under than the headache and cost of been over .
d
No, as I intend to push on . If I was going to stop with two vans then I'd do as you suggest but actually I'm looking for further growth.
If I lose a few customers then so be it. Incidentally I am not passing on the full 20%. New customers in the last 6-8 months were mostly priced with the VAT in. Only early customers are getting the 20%. Some are getting 10-15%. I expect to lose some, but over a 12 month period I am well over the Vat threshold so I'd have to sell 1/3 of my work to get it back down,
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There is a HMRC scheme that allows you to charge a lower rate of VAT, I think something like 11%. The downside to it is that you agree not to claim back any VAT you are charged for goods and services. You would still be better off though. Its designed for Businesses like ours that don't carry "stock" as do retail outlets.
The VAT threshold is a blunt tool that prevents many small businesses from expanding. You have to decide whether to stay small or really expand in order to make it worthwhile. As they say on Dragons Den, you can either have 100% of a small pot or 80% of a big pot.
My choice is to keep a simple eye. :)
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Just because your going into vat threshold you can't make your customer s pay your vat, if you do that then your gonna be back under vat threshold because you will lose so many customers by increasing your prices,
It's not my VAT. The idea of VAT is that the customer pays it, not the service provider.
It is your VAT, the customer is still only paying a price to have their windows cleaned just because you tell them a percentage
is going to the tax man makes no difference.
They will either pay it or they wont and if they do then there's no reason why you couldn't be getting that price Vat reg. or not.
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There is a HMRC scheme that allows you to charge a lower rate of VAT, I think something like 11%. The downside to it is that you agree not to claim back any VAT you are charged for goods and services. You would still be better off though. Its designed for Businesses like ours that don't carry "stock" as do retail outlets.
The VAT threshold is a blunt tool that prevents many small businesses from expanding. You have to decide whether to stay small or really expand in order to make it worthwhile. As they say on Dragons Den, you can either have 100% of a small pot or 80% of a big pot.
My choice is to keep a simple eye. :)
Excellent post.
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It's all down to the individual. What they want in their business life and personal life. How comfortable they feel about expansion or to maintain their level of turnover. (With expansion comes hassle and more of it) Depends on what their ambitions are. 8 Weekly is one of the more ambitious on here in my eyes, and probably one of those on here with a decent business head on his shoulders.
I'm in a position of change at the moment and am hoping to implement some business changes in the next week or two which are not what 8 Weekly would do (as he's told me). But Im not 8 Weekly and neither is he me. Maybe if he were in my shoes he might do things my way. Saying that, if I were in his shoes I'd like to think I might do things the way he is doing them, but then again Im not him - and I'm not even in his shoes - so maybe I wouldn't ;)
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Just because your going into vat threshold you can't make your customer s pay your vat, if you do that then your gonna be back under vat threshold because you will lose so many customers by increasing your prices,
It's not my VAT. The idea of VAT is that the customer pays it, not the service provider.
It is your VAT, the customer is still only paying a price to have their windows cleaned just because you tell them a percentage
is going to the tax man makes no difference.
They will either pay it or they wont and if they do then there's no reason why you couldn't be getting that price Vat reg. or not.
No, you're wrong. The point of VAT is that it's paid by the consumer. In a business like this it's a risk to pass it on, but it doesn't change the fact that it is intended to be a tax on the consumer. Apple for example don't pay the VAT on an Ipad. The consumer does. Similarly the local dealership doesn't pay the VAT on labour prices. You do.
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The thing is I don't think 8 weekly has give this enough thought, you don't go VAT reg. unless your looking to expand
to a point well beyond where he is now, so why worry about taking a small hit in the short term.
He has a got a price range that's good enough to get him to the Vat threshold so instead of faffing about with prices he should now
be concentrating on upping his workload as quickly as possible.
Yes if he thinks he is in a position to demand higher prices then put them up but it shouldn't be about trying to pull back the VAT.
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The thing is I don't think 8 weekly has give this enough thought, you don't go VAT reg. unless your looking to expand
to a point well beyond where he is now, so why worry about taking a small hit in the short term.
He has a got a price range that's good enough to get him to the Vat threshold so instead of faffing about with prices he should now
be concentrating on upping his workload as quickly as possible.
Yes if he thinks he is in a position to demand higher prices then put them up but it shouldn't be about trying to pull back the VAT.
It's the early customers taking the hit to bring them in line with a pricing standard that's been in place for somne time.
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Just because your going into vat threshold you can't make your customer s pay your vat, if you do that then your gonna be back under vat threshold because you will lose so many customers by increasing your prices,
It's not my VAT. The idea of VAT is that the customer pays it, not the service provider.
It is your VAT, the customer is still only paying a price to have their windows cleaned just because you tell them a percentage
is going to the tax man makes no difference.
They will either pay it or they wont and if they do then there's no reason why you couldn't be getting that price Vat reg. or not.
No, you're wrong. The point of VAT is that it's paid by the consumer. In a business like this it's a risk to pass it on, but it doesn't change the fact that it is intended to be a tax on the consumer. Apple for example don't pay the VAT on an Ipad. The consumer does. Similarly the local dealership doesn't pay the VAT on labour prices. You do.
Your missing the point, if you can get £20 for a clean without being VAT reg. then what's the difference getting it VAT reg.,
its a tax on product/service but it still comes from our profits.
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Is all of your work priced to the maximum your customer base will tolerate Sean?
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Is all of your work priced to the maximum your customer base will tolerate Sean?
Good question as if your current domestic customers have not had a price increase for a long while the cost of VAT could be absorbed into the price increase surely? Just means your firm don't benefit from the price increase but vat man does.
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Is all of your work priced to the maximum your customer base will tolerate Sean?
I honestly don't know do any of us ? I'm not for one minute saying 8 weekly wont get the price increase was just pointing out
that its still him who will be paying the VAT from his profit as if he wasn't VAT reg. that price rise would be going to him.
Doesn't really mean anything at the end of the day if your plan is expansion other than to bring it home that its still costing
you money and that the real way to get it back is by expanding as quick as possible.
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Is all of your work priced to the maximum your customer base will tolerate Sean?
I honestly don't know do any of us ? I'm not for one minute saying 8 weekly wont get the price increase was just pointing out
that its still him who will be paying the VAT from his profit as if he wasn't VAT reg. that price rise would be going to him.
In simple terms once vat registered all you are is an unpaid tax collector so have to charge vat on every bill regardless. Then have to hand it over whatever you claim off the customer.
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But the price is only being implemented because he's going VAT registered. Thats how it is with any business that charges VAT.
Charge for the service or goods provided + VAT charge. You're playing with words in reality Sean, just twisting the scenario about. Of course we could all no doubt improve our earnings by upping our rates but we do not know if anyone will swallow those charges. If they do does then mean we ought to then smack the customer with ANOTHER 20% charge, tell them its for VAT, and see if they swallow that too. Its just games. Your price is your price, its probably different to mine, it might be the same as Bill Bloggs down the road, but if your VAT registered its gonna have a surcharge on it as well.
Go VAT registered Sean, up your rates and see if you're profit margin is down.
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Whatever point Seank us trying to make is irrelevant anyway. I've exceeded the Vat limit and I have to register. I have been trading over the limit monrh on month for over a year so this is well planned for (whatever seank thinks). :)
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I am not playing with words QL I am only pointing out that going VAT reg. has a cost to your business and upping
your price doesn't remove that cost.
Yes 8 weekly's price increase will take the sting out of it as he will be no worse off financially but the cost will still be there.
Doesn't matter what he charges he will now have to make between 11% and 20% more just to break even and that extra can
only be justified by expanding, put it this way you would be a very foolish person to go VAT reg. if you goal was to reach £100k.
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Whatever point Seank us trying to make is irrelevant anyway. I've exceeded the Vat limit and I have to register. I have been trading over the limit monrh on month for over a year so this is well planned for (whatever seank thinks). :)
How much grace do they acutal give you then if you have been over the vat threashold for over a year ???
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I am not playing with words QL I am only pointing out that going VAT reg. has a cost to your business and upping
your price doesn't remove that cost.
Yes 8 weekly's price increase will take the sting out of it as he will be no worse off financially but the cost will still be there.
Doesn't matter what he charges he will now have to make between 11% and 20% more just to break even and that extra can
only be justified by expanding, put it this way you would be a very foolish person to go VAT reg. if you goal was to reach £100k.
You don't really have any choice in the matter do you seank irrespective of how much turnover you want once you reach the vat threshold surely?
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Whatever point Seank us trying to make is irrelevant anyway. I've exceeded the Vat limit and I have to register. I have been trading over the limit monrh on month for over a year so this is well planned for (whatever seank thinks). :)
Mate I am not against what your doing, if your plan is to expand and keep expanding then you have no choice and like I said upping your prices will at least take the sting out of it for a while.
Personally I would have taken the hit price wise and went more along the lines of building a bigger business with a trusted
price but that would be my choice, either way your now going to have to grow your business to make this decision
worthwhile which is a gutsy move in my books.
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I am not playing with words QL I am only pointing out that going VAT reg. has a cost to your business and upping
your price doesn't remove that cost.
Yes 8 weekly's price increase will take the sting out of it as he will be no worse off financially but the cost will still be there.
Doesn't matter what he charges he will now have to make between 11% and 20% more just to break even and that extra can
only be justified by expanding, put it this way you would be a very foolish person to go VAT reg. if you goal was to reach £100k.
You don't really have any choice in the matter do you seank irrespective of how much turnover you want once you reach the vat threshold surely?
How do you not have a choice ? once you reach the VAT threshold your choice is to keep expanding or stay below it, now if
your plan is to only expand by 20% then your not going to be any better off so going VAT reg. would be a bit silly, that's why
its something not to be taken lightly.
There is a point where it becomes worthwhile but I'm sure somebody on here who has already gone down that road would be
better qualified to say what it is.
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If you are happy to delibratly stay below then fair enough as I'm not arguing that point at all. However in doing so you could end up turning a lot of profitable work down for they sake of not wanting to be vat registered which seems a bit crazy to me.
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If you are happy to delibratly stay below then fair enough as I'm not arguing that point at all. However in doing so you could end up turning a lot of profitable work down for they sake of not wanting to be vat registered which seems a bit crazy to me.
Your just agreeing with what has already been said. ;D but there's nothing crazy about it as going VAT reg. is major step for anybody and one that needs serious consideration, you don't do it for the sake of turning down a grand's worth of work.
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If you are happy to delibratly stay below then fair enough as I'm not arguing that point at all. However in doing so you could end up turning a lot of profitable work down for they sake of not wanting to be vat registered which seems a bit crazy to me.
Your just agreeing with what has already been said. ;D but there's nothing crazy about it as going VAT reg. is major step for anybody and one that needs serious consideration, you don't do it for the sake of turning down a grand's worth of work.
Some firms on here I'm sure can turnover a lot more than that in a day so for them being vat regestered is no hassle at all?
Anyway all this talk about work is making me fell very tired so I'm off for me afternoon nap now as old people do ;D
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I am not playing with words QL I am only pointing out that going VAT reg. has a cost to your business and upping
your price doesn't remove that cost.
Yes 8 weekly's price increase will take the sting out of it as he will be no worse off financially but the cost will still be there.
Doesn't matter what he charges he will now have to make between 11% and 20% more just to break even and that extra can
only be justified by expanding, put it this way you would be a very foolish person to go VAT reg. if you goal was to reach £100k.
You don't really have any choice in the matter do you seank irrespective of how much turnover you want once you reach the vat threshold surely?
How do you not have a choice ? once you reach the VAT threshold your choice is to keep expanding or stay below it, now if
your plan is to only expand by 20% then your not going to be any better off so going VAT reg. would be a bit silly, that's why
its something not to be taken lightly.
There is a point where it becomes worthwhile but I'm sure somebody on here who has already gone down that road would be
better qualified to say what it is.
You're correct.
Whats VAT threshold now , 82K ? Lets see how it looks..........
Turnover 80K = no vat.
Turnover 100k, so VAT payable even at flat rate scheme of 11% = £11k
11k from 100k = 89k.
The extra 20k in sales ,above the VAT threshold has resulted in a net sales of 9k more.
How much does it cost to clean the extra 20k ? Well 20K over the year equates to approx £400 per week. Using the OP's example of £850 a week cleaned per man, that means its a half week to clean the extra? Half a weeks wage over the year must be 9k ?
Or maybe the OP is going to absorb the extra 20K into the current operation? If thats the case, assuming the workload is spread equally between the two of them the OP would pay an extra 4.5K to his employee and generate himself an extra 4.5k for working harder?
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I've only got to pay 12% VAT ;D
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8 weekly
We went VAT 4 years ago and it was the best thing I've ever done!!
No more worrying about going over the threshold :D
You don't have to tell your domestics you are VAT or they are paying VAT as long as you display a vat number on all paper work .
We still clean a lot of domestic and always price everything with VAT but we are now mainly commercial and being VAT registered opened a few more big doors for us!! (Don't see what being vat Reg has to do with it but it helped ;))
We did not bother with the flat rate as I wanted to claim every penny back from the tax man ;D
As long as you don't spend your VAT money (open a separate account and keep it in there) you'll be fine
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Lot more to locking the van up and going home when your VAT registered,thought about it and went down another route for now,I can see the appeal some firms only want to deal with VAT registered companies and if you have lots of commercial work and all of a sudden a good couple of jobs Come in its difficult to avoid. There not silly these TAX people,they know you being self employed it's easy to hit the VAT limit once the work starts coming in especially if there's a a couple of you like I say full time it's almost harder work trying to avoid it.
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Not read all the posts so may have been suggested already,
We went vat 18 months ago, this doesn't just come out of the blue, (although it's way too low a limit) we increased prices before hitting the vat by 15% under general price increase we do in April ( covers the flat vat ) we also looked for and got a lot more commercial work that we could charge 20% vat, while paying 11% this helped greatly before having to go to the full 20%
Remember at 11% you can only claim vat on orders/items over 2k spend but you will be able to back date things like vans
Darran
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so back to tthe question how many you lost ;D
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I think you can roughly tell if you'll lose any or many by your customer base,a lot of domestics I've got when I first quoted they said but there's VAT in that yeah they were expecting it.
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so back to tthe question how many you lost ;D
None so far, but early days yet!
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Not read all the posts so may have been suggested already,
We went vat 18 months ago, this doesn't just come out of the blue, (although it's way too low a limit) we increased prices before hitting the vat by 15% under general price increase we do in April ( covers the flat vat ) we also looked for and got a lot more commercial work that we could charge 20% vat, while paying 11% this helped greatly before having to go to the full 20%
Remember at 11% you can only claim vat on orders/items over 2k spend but you will be able to back date things like vans
Darran
I thought it was 12%?
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Get custys to pay cash, prob solved!! ;D ;D
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Not read all the posts so may have been suggested already,
We went vat 18 months ago, this doesn't just come out of the blue, (although it's way too low a limit) we increased prices before hitting the vat by 15% under general price increase we do in April ( covers the flat vat ) we also looked for and got a lot more commercial work that we could charge 20% vat, while paying 11% this helped greatly before having to go to the full 20%
Remember at 11% you can only claim vat on orders/items over 2k spend but you will be able to back date things like vans
Darran
I thought it was 12%?
First year is 11%, then 12% thereafter
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Not read all the posts so may have been suggested already,
We went vat 18 months ago, this doesn't just come out of the blue, (although it's way too low a limit) we increased prices before hitting the vat by 15% under general price increase we do in April ( covers the flat vat ) we also looked for and got a lot more commercial work that we could charge 20% vat, while paying 11% this helped greatly before having to go to the full 20%
Remember at 11% you can only claim vat on orders/items over 2k spend but you will be able to back date things like vans
Darran
I thought it was 12%?
First year is 11%, then 12% thereafter
Darran's in for a surprise then. ;D
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Get yourself as much commercial work as possible, you can make 9% ON each contact ( flat rate ), pass this on to your domestic customers
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Get yourself as much commercial work as possible, you can make 9% ON each contact ( flat rate ), pass this on to your domestic customers
Is that legal ???
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Get yourself as much commercial work as possible, you can make 9% ON each contact ( flat rate ), pass this on to your domestic customers
Is that legal ???
It isn't like it sounds. He just means use commercial work to offset the impact of not passing the VAT to domestic customers.
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Get yourself as much commercial work as possible, you can make 9% ON each contact ( flat rate ), pass this on to your domestic customers
Is that legal ???
It isn't like it sounds. He just means use commercial work to offset the impact of not passing the VAT to domestic customers.
But how would it work, your paying the VAT man 11% and the commercial company will be claiming back 20%.
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Get yourself as much commercial work as possible, you can make 9% ON each contact ( flat rate ), pass this on to your domestic customers
Is that legal ???
It isn't like it sounds. He just means use commercial work to offset the impact of not passing the VAT to domestic customers.
But how would it work, your paying the VAT man 11% and the commercial company will be claiming back 20%.
You'll be charging 20%, but if you're on the flat rate scheme you pay 12% and the 8% is "profit".
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Well done 8 wky.
That's how it's done, don't worry about Sean k he barely makes it to the tax threshold for income tax ;D ;D
( I'm so jealous :D )
In for a surprise ??? Don't think so....
Darran
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Well done 8 wky.
That's how it's done, don't worry about Sean k he barely makes it to the tax threshold for income tax ;D ;D
( I'm so jealous :D )
In for a surprise ??? Don't think so....
Darran
In that it's only 11% for the first year.
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Don't really follow, your going vat flat rate 11%
We were 11% before the year end our turnover meant we had to move to 20% bracket, no shock
( well maybe to the nay Sayers on here )
Darran
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Don't really follow, your going vat flat rate 11%
We were 11% before the year end our turnover meant we had to move to 20% bracket, no shock
( well maybe to the nay Sayers on here )
Darran
If you go onto the fla rate scheme, for a window cleaning business it is 12% but HMRC discount it down to 11% in first year. If you have gone over £230,000 in the first year, that's fantastic.
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Not when you have to sign the cheques it's not >:(
Darran
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Not when you have to sign the cheques it's not >:(
Darran
Pay online. ;)
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Seriously though, where has the growth mostly come from in terms of marketing? Is it domestic work or commercial?
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The only way I can avoid vat is being a one man band, if I took on someone else I would be in the vat threshold. Im allready a bit into the higher tax band, which in my opinion is unfair and is levelied too low.
seems the harder you work in this country the more you get shafted.
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Yes totally agree trippy.
The biggest problem with window cleaning is you have no regular stock or consumables to offset the vat.
Growth has been across the board, but mainly concentrated on commercial works. It's been a big help moving into pressure washing, we get great add on work for schools and housing associations.
Also any works such as pressure washing - soffit fascia guttering are quoted plus vat on domestic stuff.
Darran
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Well done 8 wky.
That's how it's done, don't worry about Sean k he barely makes it to the tax threshold for income tax ;D ;D
( I'm so jealous :D )
In for a surprise ??? Don't think so....
Darran
I asked a simple question but to be honest if a bone head like you can make it there's hope for us all, maybe you should
get the Mrs to have a look at it and give us an answer. ::)roll
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seems the harder you work in this country the more you get shafted.
There's no "seems" about it. Thats how its designed, you earn more, you pay more. This is not a hidden fact.
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Get yourself as much commercial work as possible, you can make 9% ON each contact ( flat rate ), pass this on to your domestic customers
Is that legal ???
It isn't like it sounds. He just means use commercial work to offset the impact of not passing the VAT to domestic customers.
But how would it work, your paying the VAT man 11% and the commercial company will be claiming back 20%.
You'll be charging 20%, but if you're on the flat rate scheme you pay 12% and the 8% is "profit".
That's not the question the question is, what happens if the company you charge tries to claim back the 20% but the
VAT man has only received 12%. in other words will the VAT man be out of pocket.
While your at it please explain to Smudger that asking somebody a question does not mean your jealous.
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Get yourself as much commercial work as possible, you can make 9% ON each contact ( flat rate ), pass this on to your domestic customers
Is that legal ???
It isn't like it sounds. He just means use commercial work to offset the impact of not passing the VAT to domestic customers.
But how would it work, your paying the VAT man 11% and the commercial company will be claiming back 20%.
You'll be charging 20%, but if you're on the flat rate scheme you pay 12% and the 8% is "profit".
That's not the question the question is, what happens if the company you charge tries to claim back the 20% but the
VAT man has only received 12%. in other words will the VAT man be out of pocket.
While your at it please explain to Smudger that asking somebody a question does not mean your jealous.
Its correct what he says about the making 8 or 9 % on a VAT invoice, thats how it works (the flat rate scheme). Its not a gimmick or something, thats how its understood to work via HMRC website advice. The VAT man will be technically out of pocket, but the scheme is designed to make it easier for small buisness who operate on a cash basis to operate within the VAT scheme. Thats why its just simplified and based on a percentage of your turnover.
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We have our window cleaning business on the flat rate scheme (11%) However it's based on total turnover, you can't deduct anything you buy from it.
It's beneficial for businesses that don't have a lot of vatable expenses, such as window cleaning where you main cost is wages which isn't vat rated. Our other big costs are the vehicles and fuel, but the 9% saving far offsets not being able to claim van on these.
As for a 2 man band not being able to reach the vat limit is nonsense, our normal performance targets are £200/man/day and they regularly do a lot more than that.
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We have our window cleaning business on the flat rate scheme (11%) However it's based on total turnover, you can't deduct anything you buy from it.
It's beneficial for businesses that don't have a lot of vatable expenses, such as window cleaning where you main cost is wages which isn't vat rated. Our other big costs are the vehicles and fuel, but the 9% saving far offsets not being able to claim van on these.
As for a 2 man band not being able to reach the vat limit is nonsense, our normal performance targets are £200/man/day and they regularly do a lot more than that.
According to the HMRC website it should be 12%. I assume it's "any other activity not listed elsewhere". https://www.gov.uk/vat-flat-rate-scheme/how-much-you-pay
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Get yourself as much commercial work as possible, you can make 9% ON each contact ( flat rate ), pass this on to your domestic customers
Is that legal ???
It isn't like it sounds. He just means use commercial work to offset the impact of not passing the VAT to domestic customers.
But how would it work, your paying the VAT man 11% and the commercial company will be claiming back 20%.
You'll be charging 20%, but if you're on the flat rate scheme you pay 12% and the 8% is "profit".
That's not the question the question is, what happens if the company you charge tries to claim back the 20% but the
VAT man has only received 12%. in other words will the VAT man be out of pocket.
While your at it please explain to Smudger that asking somebody a question does not mean your jealous.
Its correct what he says about the making 8 or 9 % on a VAT invoice, thats how it works (the flat rate scheme). Its not a gimmick or something, thats how its understood to work via HMRC website advice. The VAT man will be technically out of pocket, but the scheme is designed to make it easier for small buisness who operate on a cash basis to operate within the VAT scheme. Thats why its just simplified and based on a percentage of your turnover.
Cheers CleanClear, nicely answered.
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The only way I can avoid vat is being a one man band, if I took on someone else I would be in the vat threshold. Im allready a bit into the higher tax band, which in my opinion is unfair and is levelied too low.
seems the harder you work in this country the more you get shafted.
I've just looked. I didn't realise it was as low as it is. 32K bleeding ridiculous!
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The only way I can avoid vat is being a one man band, if I took on someone else I would be in the vat threshold. Im allready a bit into the higher tax band, which in my opinion is unfair and is levelied too low.
seems the harder you work in this country the more you get shafted.
I've just looked. I didn't realise it was as low as it is. 32K bleeding ridiculous!
Its £32k after allowances which makes it just over £42k, still not good though.
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The only way I can avoid vat is being a one man band, if I took on someone else I would be in the vat threshold. Im allready a bit into the higher tax band, which in my opinion is unfair and is levelied too low.
seems the harder you work in this country the more you get shafted.
I've just looked. I didn't realise it was as low as it is. 32K bleeding ridiculous!
I think it's actually 42k matt.. that's how I understood it?
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Still too much ;D
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Crikey, is that all it is? Most on here will be past that by week Six of their trading year!! :o
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I think the higher income tax comes in at approx 42 k thats after expenditure. That just pushes me slightly into the 40% tax band.
It needs to go higher in my opinion, maybe tax @ 20% for the first 60 k then 40% after that.
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The only way I can avoid vat is being a one man band, if I took on someone else I would be in the vat threshold. Im allready a bit into the higher tax band, which in my opinion is unfair and is levelied too low.
seems the harder you work in this country the more you get shafted.
Nail well and truly hit on the head I agree with everything you've said.
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I personally think it would be a lot fairer to step it... e.g.
- 42k =20%
42-52k =25%
52-62k =30%
62-82=40%
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Seank - Don't be soooo touchy, just injecting a little humour ( sorry you took it the other way )
Yes, I look back at the first year or so of trading and it was so easy and straightforward then, simple tax return end of ! ( sometimes you look back and think that's better than all the differing taxes etc I'm dealing with today ) sorry you took that wrongly as well...
Thankfully Mrs smudger runs the office otherwise I simply wouldn't manage, I have no qualms with that.
Darran
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Get yourself as much commercial work as possible, you can make 9% ON each contact ( flat rate ), pass this on to your domestic customers
Is that legal ???
It isn't like it sounds. He just means use commercial work to offset the impact of not passing the VAT to domestic customers.
But how would it work, your paying the VAT man 11% and the commercial company will be claiming back 20%.
You'll be charging 20%, but if you're on the flat rate scheme you pay 12% and the 8% is "profit".
That's not the question the question is, what happens if the company you charge tries to claim back the 20% but the
VAT man has only received 12%. in other words will the VAT man be out of pocket.
While your at it please explain to Smudger that asking somebody a question does not mean your jealous.
Its correct what he says about the making 8 or 9 % on a VAT invoice, thats how it works (the flat rate scheme). Its not a gimmick or something, thats how its understood to work via HMRC website advice. The VAT man will be technically out of pocket, but the scheme is designed to make it easier for small buisness who operate on a cash basis to operate within the VAT scheme. Thats why its just simplified and based on a percentage of your turnover.
Even if you pay the flat rate, they will get their money out of you. Yes it looks better of course, but that 8% 'profit' you make you still have to pay tax on, and you can't claim VAT back on purchases under £2k. Whichever way it's designed for them to get as much money as possible. As my accountant explained, 'they're not silly'.
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Well no losses so far. Not everyone is getting 20%, and all customers in the last 6 months or so are on prices with the VAT factored in (though it'll be a shame to lose the 12%). So far so good. Here's one email from a 20% increase - Up from £95 to £114:
Dear Steve,
Thanks - this has been paid today.
Sorry to hear of the price increase, but glad if that means your business is growing!
Best wishes,
Thomas
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The only way I can avoid vat is being a one man band, if I took on someone else I would be in the vat threshold. Im allready a bit into the higher tax band, which in my opinion is unfair and is levelied too low.
seems the harder you work in this country the more you get shafted.
Nail well and truly hit on the head I agree with everything you've said.
Nope. I don't. Trippy if you're only just hitting the higher tax bracket don't assume you'll double your income to hit the VAT bracket by taking on someone else. That'll mean doubling your income and that won't happen with just one more. Be that in the same van as you or in a second vehicle.
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Matt if I took on someone else I would only do so with another van, two men one van is like throwing money down the toilet if you ask me, both would slow each other down.
I would expect any employee to turn over a min of 50 k per year even with holidays.
That 50k would easily push me in the vat zone meaning I would have to re design my business and start looking at the comercial sceene.
Im happy enough at the moment doing what I do on residential customer base.
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1 person will make a fraction of a difference on your earnings I agree with that the thing it does as we all know is make the working week easier,i would say if someone said you'll be no better off you'll be earning the same but your only going to need to do half the work now most would take that lol. Thinking about it seriously and putting it all on paper it will be more hassle,maybe it's just me but I've chatted to a few windys over the past few weeks and they have all got employees who are all unreliable. Trouble is all there work now requires at least 2 to keep up with the work even on the pole.
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. Nope. I don't. Trippy if you're only just hitting the higher tax bracket don't assume you'll double your income to hit the VAT bracket by taking on someone else. That'll mean doubling your income and that won't happen with just one more. Be that in the same van as you or in a second vehicle.
Don't forget income tax is calculated on profit, whereas Vat is based on turnover. Because he's only just into the higher income tax bracket, doesn't mean his turnover couldn't already be verging on the £82k threshold
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1 person will make a fraction of a difference on your earnings I agree with that the thing it does as we all know is make the working week easier,i would say if someone said you'll be no better off you'll be earning the same but your only going to need to do half the work now most would take that lol. Thinking about it seriously and putting it all on paper it will be more hassle,maybe it's just me but I've chatted to a few windys over the past few weeks and they have all got employees who are all unreliable. Trouble is all there work now requires at least 2 to keep up with the work even on the pole.
Thats exactly how it is for me. I offloaded a nice wedge of work yesterday. I wonder if thats the pay-off when you employ, you end up getting a fat pocket of cash at the end of it all but not a lot whilst you're employing.
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I would expect any employee to turn over a min of 50 k per year even with holidays.
Rocking horse $hite mate.
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I would expect any employee to turn over a min of 50 k per year even with holidays.
Rocking horse $hite mate.
Disagree
Darran
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I would expect any employee to turn over a min of 50 k per year even with holidays.
Rocking horse $hite mate.
Disagree
Darran
Popcorn anyone ? ;D
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No need for popcorn. I respect Darran and his opinions.
My angle is if someone is able to earn you £1,100/£1,200 a week then they're not likely to be the sort working on the cards. I don't dispute there are people out there that can earn you that amount of income but they are rare and you would have to pay them a damn good wedge. And they would deserve every penny.
Most sole-traders who work for themselves don't earn that much - how is it that someone else would do that and more for you?
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Smurf does like to try and wind it up ;D
My situation may be a little different as we now do a lot of pressure washing and gutter clearing which are different price structure to just the windows.
It's tricky to give an answer on this forum, mainly because the post would be very long, most likely boring and people picking one line out of context esp, if the text is not exactly how you thought it should read.
I don't think because someone can turnover £250 a day they are going to leave, and set up on their own, it's more complex than that, we all undervalue what we have done in building up a business - not everyone can do this, and how many people are in a position of being able to afford little to no income for a few months while finding customers and investing in a van and equipment ??
Darran
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I disagree Matt. My worker turns over more than me in a day. I've got my second one lined up. Both will get paid slightly less than 1/3 of what they turn over.
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Which is IMO about the correct ratio
Darran
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I disagree Matt. My worker turns over more than me in a day. I've got my second one lined up. Both will get paid slightly less than 1/3 of what they turn over.
Good luck to you 8 weekly you seem to be very fortunate in getting good employees that work well for you and are able to be motivated enough to get there arse out of bed and work for a living,I don't think it has much to do with you personally I think a lot of it is luck IMO. I could give a bloke 25 jobs a week and he could go and earn a thousand pound but I honestly haven't found anyone I trust enough to do it for me.
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I disagree Matt. My worker turns over more than me in a day. I've got my second one lined up. Both will get paid slightly less than 1/3 of what they turn over.
Good luck to you 8 weekly you seem to be very fortunate in getting good employees that work well for you and are able to be motivated enough to get there arse out of bed and work for a living,I don't think it has much to do with you personally I think a lot of it is luck IMO. I could give a bloke 25 jobs a week and he could go and earn a thousand pound but I honestly haven't found anyone I trust enough to do it for me.
However, I reckon the reason you can't find a decent worker is nothing to do with lick and totally down to you. ;)
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Don't get me wrong I'm not having a go at you I'm just saying you've been fortunate in who you've got,how long have you employed there might come a time when you'll know exectly what I'm on about it can be a nightmare. Who knocks your door for a job to a degree is luck regardless of the pay your offering them,you might come on here in a year and agree with me.
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I disagree Matt. My worker turns over more than me in a day. I've got my second one lined up. Both will get paid slightly less than 1/3 of what they turn over.
Yea but you're an ol' crock ;)
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I disagree Matt. My worker turns over more than me in a day. I've got my second one lined up. Both will get paid slightly less than 1/3 of what they turn over.
Yea but you're an ol' crock ;)
True. In my mind I will be seriously wound down day to day window cleaning in 3 months.
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I went flat rate registered almost a year ago its a bugger but we still save money compared to being full rate you pay 12% of turnover you can't claim costs back unless assets over 2k so vans systems etc is fine but nearly all of our clients are domestic so we have either swallowed or put them up a few quid out of about600 customers at the time we lost about3 customers
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I would expect any employee to turn over a min of 50 k per year even with holidays.
That figure surprises me because I've never even got into the £40k turnover level. I could if I put myself out more though. Oh sure, I've had weeks where I've done more that £1k, but sustaining it week in week out is the tricky bit.
I do believe you though, unlike some, because if I carried out intensive canvassing, priced it all higher than current work, and gradually dropped the poorest paying work from the bottom end, I would get there in a year or two.
I'm guessing that an employee would need decent financial incentives to do this.
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Many think a vat reg is an achievement like some sort of milestone of success. It`s not its a level of increased admin and state control of you business. I would always avoid at all costs. The only milestones is your business have become large enough for the state to be interested in it.
The truth of the matter is you will never make more money out of what you are allowed to claim. It`s a system for the tax man with no advantages for the owner. Just much admin and more state interference. It like a new partner that takes but never adds a penny.
I have heard of so many on herer announce the big day. I know i`s a load of crap as you to find out and will be difficult to turn around.
These are the facts of big is not always better.
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Lost one today. It was underpriced at £20 (very early job - 4 bed detached with conservatory) & I was putting it up to £24.
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You lost it coz you put vat on did you
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You lost it coz you put vat on did you
I added the VAT. I wasn't there but she said "£24 is too much". So it was because it went up. It's underpriced at £20. Even at £24 it's underpriced
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Many think a vat reg is an achievement like some sort of milestone of success. It`s not its a level of increased admin and state control of you business. I would always avoid at all costs. The only milestones is your business have become large enough for the state to be interested in it.
The truth of the matter is you will never make more money out of what you are allowed to claim. It`s a system for the tax man with no advantages for the owner. Just much admin and more state interference. It like a new partner that takes but never adds a penny.
I have heard of so many on herer announce the big day. I know i`s a load of crap as you to find out and will be difficult to turn around.
These are the facts of big is not always better.
Couldn't agree more.
I find it quite amusing when they "announce the big day" ;D It beggars belief the intellect of some of these "big boys" LMAO ;D
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Many think a vat reg is an achievement like some sort of milestone of success. It`s not its a level of increased admin and state control of you business. I would always avoid at all costs. The only milestones is your business have become large enough for the state to be interested in it.
The truth of the matter is you will never make more money out of what you are allowed to claim. It`s a system for the tax man with no advantages for the owner. Just much admin and more state interference. It like a new partner that takes but never adds a penny.
I have heard of so many on herer announce the big day. I know i`s a load of crap as you to find out and will be difficult to turn around.
These are the facts of big is not always better.
Couldn't agree more.
I find it quite amusing when they "announce the big day" ;D It beggars belief the intellect of some of these "big boys" LMAO ;D
The thing is that if you want to grow the business into something that is worth something - and to me that means to provide an income without having to clean windows myself and therefore an income into my "retirement" - you have no choice but to go past the threshold and deal with the consequences of that. It isn't a badge of honour, it's just a fact of growing your business.
There are quite a few on here that will be interested in how many customers I lose as a result. Some, like you and other naysayers will no doubt be happy at my losses and say "I told you so", but I actually never believed I would lose many. I think those afraid of passing the VAT on will find my experience useful.
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I agree to a point 8 weekly but it's a bit of a joke when you talk to some windys out there,just because someone's doing the job for the government of collecting there VAT for them means nothing to what they are actually earning at the end of the month. If your charging VAT the chances are your employing at least 1 person you have all the extra paperwork of being VAT expenses for employees etc,if someone is paying VAT does it mean there earning more than someone that is not no it doesn't. I reckon to be worth doing it you really need to see yourself being right up and over the threshold for it to be worth doing,some I speak to seem to think it's given them bragging rights or a certificate of achievement being VAT registered lol,in reality it's a pain in the arse.
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There was an old guy that had a lot of work not to far from me .he had a couple of lads working for him .he was vat registered. Over a couple of years he lost a lot of his residential customers .it would worry me that I was leaving the door open to competition, who could easily be a fith cheaper
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Most domestic would choose the bloke not VAT registered
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Many think a vat reg is an achievement like some sort of milestone of success. It`s not its a level of increased admin and state control of you business. I would always avoid at all costs. The only milestones is your business have become large enough for the state to be interested in it.
The truth of the matter is you will never make more money out of what you are allowed to claim. It`s a system for the tax man with no advantages for the owner. Just much admin and more state interference. It like a new partner that takes but never adds a penny.
I have heard of so many on herer announce the big day. I know i`s a load of crap as you to find out and will be difficult to turn around.
These are the facts of big is not always better.
Couldn't agree more.
I find it quite amusing when they "announce the big day" ;D It beggars belief the intellect of some of these "big boys" LMAO ;D
I actually don't think he'll lose many at all. In my experience once they have you and are happy with your service they'll keep you.
I'm not sure why you two would knock or decry "the big boys", or anyone trying to be big or achieve something. I could think of nothing worse than having to deal with VAT, more admin etc.., but of course i just work on my own. I guess the guys who are Ltd. , employ and are VAT registered don't like it either but they can take a week off and the business still rolls along making them a wage. Where mine (and possibly yours) just has an unpaid week off. Horses for courses and all that. Not everyone can put the brakes on when they've personally achieved enough like me (and probably you) , some people wanna keep on going.
And to be honest i like them to keep on going, as they do ,they incur more business costs along the way providing a niche for me to be far more cost effective for some than using a larger company (and its associated overheads).
So while some are foreward thinking using "go Cardless" etc... I'm utilising the "leave the money under a pot" method.
And while they're filling out VAT forms, i'm filling out a Working Tax Credit one !! ;D
But ultimatley once you go bigger there's no getting away from it.
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so your basically saying you work cash in hand and claim benefits?
you shouldnt be claiming working tax credits if your window cleaning mate. ::)roll
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Do you pay all your tax requirements Dazmond?
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Many think a vat reg is an achievement like some sort of milestone of success. It`s not its a level of increased admin and state control of you business. I would always avoid at all costs. The only milestones is your business have become large enough for the state to be interested in it.
The truth of the matter is you will never make more money out of what you are allowed to claim. It`s a system for the tax man with no advantages for the owner. Just much admin and more state interference. It like a new partner that takes but never adds a penny.
I have heard of so many on herer announce the big day. I know i`s a load of crap as you to find out and will be difficult to turn around.
These are the facts of big is not always better.
Couldn't agree more.
I find it quite amusing when they "announce the big day" ;D It beggars belief the intellect of some of these "big boys" LMAO ;D
I actually don't think he'll lose many at all. In my experience once they have you and are happy with your service they'll keep you.
I'm not sure why you two would knock or decry "the big boys", or anyone trying to be big or achieve something. I could think of nothing worse than having to deal with VAT, more admin etc.., but of course i just work on my own. I guess the guys who are Ltd. , employ and are VAT registered don't like it either but they can take a week off and the business still rolls along making them a wage. Where mine (and possibly yours) just has an unpaid week off. Horses for courses and all that. Not everyone can put the brakes on when they've personally achieved enough like me (and probably you) , some people wanna keep on going.
And to be honest i like them to keep on going, as they do ,they incur more business costs along the way providing a niche for me to be far more cost effective for some than using a larger company (and its associated overheads).
So while some are foreward thinking using "go Cardless" etc... I'm utilising the "leave the money under a pot" method.
And while they're filling out VAT forms, i'm filling out a Working Tax Credit one !! ;D
But ultimatley once you go bigger there's no getting away from it.
I also have paid time off, I use the equivalent VAT% I've not handed over to the Government to fund it. ;D
Don't assume comments are aimed at the OP either, I remember a newbie on here some time ago, he'd just started and drew a list up of his aims, going vat reg' was one of them! He didn't have a clue regarding the implications of this but no doubt had swallowed some of the bovine manure he had read on here from some of these "big boys" ::)roll
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so your basically saying you work cash in hand and claim benefits?
you shouldnt be claiming working tax credits if your window cleaning mate. ::)roll
There's a smiley there Daz, its a tongue in cheek comment. I don't qualify for WTC, i earn too much through my business bank account alone. My Mrs. also works and my kids have grown up and left so i've no dependants to cater for. But of course you wouldn't know my personal circumstances to tell me what i should or should not be doing.
And as for working cash in hand !! Well, between me and you i always feel a bit guilty over that. I generally look around and make sure no ones watching me before i stuff the notes in my money bag. ;D I just hope i never get investigated or photographed doing it ;D
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Many think a vat reg is an achievement like some sort of milestone of success. It`s not its a level of increased admin and state control of you business. I would always avoid at all costs. The only milestones is your business have become large enough for the state to be interested in it.
The truth of the matter is you will never make more money out of what you are allowed to claim. It`s a system for the tax man with no advantages for the owner. Just much admin and more state interference. It like a new partner that takes but never adds a penny.
I have heard of so many on herer announce the big day. I know i`s a load of crap as you to find out and will be difficult to turn around.
These are the facts of big is not always better.
Couldn't agree more.
I find it quite amusing when they "announce the big day" ;D It beggars belief the intellect of some of these "big boys" LMAO ;D
The thing is that if you want to grow the business into something that is worth something - and to me that means to provide an income without having to clean windows myself and therefore an income into my "retirement" - you have no choice but to go past the threshold and deal with the consequences of that. It isn't a badge of honour, it's just a fact of growing your business.
There are quite a few on here that will be interested in how many customers I lose as a result. Some, like you and other naysayers will no doubt be happy at my losses and say "I told you so", but I actually never believed I would lose many. I think those afraid of passing the VAT on will find my experience useful.
Although I've no current intentions of going past sole trader level (therefore, no VAT), if I did have such plans, I would go straight into the more complex 20% (currently) scenario. This is because if I were to jump that hurdle, I wouldn't want to mess around again later on when forced to go the 20% route.
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Then you would quite simply be throwing money away, paying 20% of your turnover when you can offset very little in return is non sencical it's bad enough at the lower level.
Darran