Clean It Up
UK Window Cleaning Forum => Window Cleaning Forum => Topic started by: Moderator David@stives on October 12, 2007, 10:13:08 pm
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Not asking for names, not if you dont want to , just how many are vat registered.
Well are you or arent you , please vote
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After reading some of the posts about prices people charge I should think that there will be quite alot that vote yes ;D
I would like to know who does vote yes. will you be one of them Dave
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im not but would like to think i will achieve that in 18 months max
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window cleaning domestic no try not to to be honest as 17.5% price hike or swallow little much I thought so opted to spilt, may hit vat this year on the website side and also commercial as this is the next target more so on commercial this is being geared up now and have spent ££££;s in the last few weeks getting what I hope is right (apart from the number >:()
the website side no doubt at all that will hit ??? then again I cant complain so :)
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Hi
Not trying to go off topic, But.
I know (think) there is a limit at which you HAVE TO be VAT registered.
But is there any advantage if you earn a fairly good amount & and spend a good amount, in opting to register, then claim all that VAT we pay out?
I may have it completely wrong & the idea may be way off base but does anyone know enough to put me right?
Thanks
Martin
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If I was earning less than the VAT limit (€35K gross) I'd be depressed,... and probably hungry too!
In Ireland, goods are 21% and services are 13.5%,.. so it works in my favour all the time.
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Hi
Not trying to go off topic, But.
I know (think) there is a limit at which you HAVE TO be VAT registered.
But is there any advantage if you earn a fairly good amount & and spend a good amount, in opting to register, then claim all that VAT we pay out?
I may have it completely wrong & the idea may be way off base but does anyone know enough to put me right?
Thanks
Martin
there is a limit, and it is swings and round abouts and many different things to consider can be a plus or can cost you a stack found that out years ago by listening to someone that thought they new, speak to an accountant or the IR they have the facts (if nothing else listen to the last part of what I just posted)
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BEING VAT REGISTRED in reallyty you are only paying 82.5% off all your gear, presuming that the seller is vat registred :)
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Windowwasher
If you are about to hit the vat threashold with web design & are a property developer also, why are you cleaning windows?
tony
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#ian
in what way did you split to avoid vat,
avoid Vat no did not want to go there at the time yes. Ispilt the company in half, with brother, I own mine he ows his, he does what he likes I carry on building, I know I am going to pay vat its a matter of when not if :( I may find it a benifit but at the start I guess not, but thats just another hurdle I will get over when the time comes, Staff is my major problem, hence investing quite a sizable chuck of money I have into water fed pole etc etc etc, I want the next level and the one above that, I see you do well that should prompt people to do better, it does me, and while I am writting, I hope i did not in away offend you about the mobilre/landline thing. I did marketing for many years and design, which I still do now,
from what I hear the vat limit has just gone up, I have not looked for a while anyone know hwt is is now?
Ian
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Windowwasher
If you are about to hit the vat threashold with web design & are a property developer also, why are you cleaning windows?
tony
Because there is a market for it ::)
thats like asking why Richard Brason sold records when he is already rich (reason he made 9 million from in) why stop if you make money, I earn for my family, when I leave this planet I want my kids to have the start I never did, is that so bad ?
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Ian
I have got very thick skin and nothing offends me, lifes to short.
The Vat limit is now £64k, its nothing to be scared of , just another landmark in your road to success
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Windowwasher
If you are about to hit the vat threashold with web design & are a property developer also, why are you cleaning windows?
tony
Because there is a market for it ::)
thats like asking why Richard Brason sold records when he is already rich (reason he made 9 million from in) why stop if you make money, I earn for my family, when I leave this planet I want my kids to have the start I never did, is that so bad ?
;D ;D ;D
Dream on.
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Ian
I have got very thick skin and nothing offends me, lifes to short.
The Vat limit is now £64k, its nothing to be scared of , just another landmark in your road to success
is it that high now ;D thats good.
agree with lifes to short had real bad news this year time after time nothing money can solve :(
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Split in 2 Dave, domestic / commercial.
I know someone in the building trade he has one business vat and one non vat.
I went vat but now reversing it as have put it into two businesses, not that I have reached 64k
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Split in 2 Dave, domestic / commercial.
is that legal ?
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I'm nowhere near VAT level. I can't see it happening while I'm a sole trader either. £64k is a lot of windows for one guy to clean in a year. On my own I doubt I would be physically able to manage it. If I employed someone then I'm sure it would eventually achievable.
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Split in 2 Dave, domestic / commercial.
is that legal ?
as far as I am aware it is if they are two seperate companies, i will be talking to someone about it soon i think at the mo i dont need to
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Quote from: Dave morris @ st-ives on Yesterday at 11:57:49pm
Quote from: D.A. Services on Yesterday at 11:37:45pm
Split in 2 Dave, domestic / commercial.
is that legal ?
as far as I am aware it is if they are two seperate companies, i will be talking to someone about it soon i think at the mo i dont need to
I'm not sure it is legal... I don't think 2 companies can use the same equipment etc...
Andy
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its not leagal but there are ways to work around it so iv been told.
I do think the goverment should consider not putting vat on income from domestics i mean how can i say to miss smith your windows are going up 17.5 % for vat?? they would just go else were.
competition is already tight enough and there is so many cow boys out there and lads who dont meet the vat threshhold!!
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Hi
Not trying to go off topic, But.
I know (think) there is a limit at which you HAVE TO be VAT registered.
But is there any advantage if you earn a fairly good amount & and spend a good amount, in opting to register, then claim all that VAT we pay out?
I may have it completely wrong & the idea may be way off base but does anyone know enough to put me right?
Thanks
Martin
The law states that if you expect to turn over 64K or more p.a. then you must register for VAT.
All that means is that you must show a charge of 17.5% VAT on all your invoices and show on your accounts records.
The up side is that you can reclaim VAT on all your purchases.
If you are turning over 64K then VAT isn't your big concern, it's more about what to spend your profit on!
You may register for VAT even if you don't hit 64K, in fact any turnover can register for VAT, the only advantage is if your purchasing costs are very high then you can claim back the VAT you paid out.
For windowcleaners that would be a waste of time, none of us spend enough on purchases to justifybeing VAT registered.........UNLESS you are expecting to turn over 64K and above...
.....which by now Dave @ St loadsamoney Ives must be close! ;)
I was registered for VAT once for 4 years, I had to be, and we had a VAT inspector come in and go through my books. They can do that at a moments notice. She spent 3 days going through them and commended us for our accuracy!
But that was a few years ago.. :'(
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Or a better idea, split your company in two. One side owned by you the other owned by your wife. That's what a lot of people do when they get to that point.
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I'm nowhere near VAT level. I can't see it happening while I'm a sole trader either. £64k is a lot of windows for one guy to clean in a year. On my own I doubt I would be physically able to manage it. If I employed someone then I'm sure it would eventually achievable.
Oh come on shiner your obviously not trying there are people on here earning over a hundred grand a year working three days a week............................ honest. ::)
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Artificial seperation is illegal, they have ways that they define it.
Eg, if husband and wife are running the same business from the same premises operating in the same kind of field then that is probably one business.
If this does not apply, (or something like)it's okay.
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Artificial seperation is illegal, they have ways that they define it.
Eg, if husband and wife are running the same business from the same premises operating in the same kind of field then that is probably one business.
If this does not apply, (or something like)it's okay.
Yep, another topic really, but it's all about control. And the tax dept, should they decide to investigate, will define that for you :o
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If I hit my targets that I have set for myself then I will have to consider becoming VAT registered in the next 12 months. I am hoping to be faced with the problem of how to introduce VAT to my domestic customers.
I know of other ways around it which I may explore nearer the time. ;)
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I'm nowhere near VAT level. I can't see it happening while I'm a sole trader either. £64k is a lot of windows for one guy to clean in a year. On my own I doubt I would be physically able to manage it. If I employed someone then I'm sure it would eventually achievable.
Oh come on shiner your obviously not trying there are people on here earning over a hundred grand a year working three days a week............................ honest. ::)
Oh alright then. Maybe £63,999 ;D
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Well don't work so many days then, just work one day a week and that should get you below the vat threshold.
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well so far 1 in 5 say they are registered out of them that replyed.
Reading other posts this figure does suprise me, i thought it would of been much lower.
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i thought it would be much higher when you read posts of people doing £300 or £400 a day either some are telling porkies or they only work two days a week , i am vat registered and earn nothing like these amounts .
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12 have voted yes but not many have said who they are, they must be shy
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off that cheeky fellow ...the taxman ;)
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Dave Morris,
I keep meaning to make an appointment with my accountant to discuss VAT registration with him!
But you seem to have a fair bit of knowledge on the subject so if you dont mind I'll pick your brains
I've heard about a flat rate scheme where VAT is set at about 10% - do you or anybody else have any info on this
Regards
Al
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I was flat rate.(different biz)
You get one percent discount for the first year.
ten percent of total turnover.
You can't claim back- apart i think like a major purchase such as a van.
You have to be accepted- you can pay quarterly online- it's very simple you don't need an accountant.
More details on tax website.
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The flat rate scheme is designed to help small businesses by letting you calculate your VAT payment as a flat rate percentage of your turnover. The percentages are decided according to the trade sector your business is in. Under the scheme you will not be able to reclaim any of the VAT you pay, as this is taken into consideration as part of the percentage calculation.
The main benefit of this scheme is that it reduces the time you spend accounting for VAT because you don’t have to record the VAT charged on each individual purchase and sale.
Businesses in their first year of VAT registration can also benefit from a 1 per cent reduction in the flat rate. To calculate this, take off 1 per cent from the flat rate for your sector. For example, if your business belongs to a sector which has a flat rate of 10 per cent, you should apply a flat rate of 9 per cent in your first year.
Who can use the scheme?
You can apply to use this scheme if:
your annual turnover (excluding VAT) will be £150,000 or less
your annual total turnover (including VAT) will be £187,500 or less.
For the second test above, ‘total turnover’ is the value (including VAT) of all your business supplies, including any exempt and non-business income. Non-business income is only included for deciding whether you can join the scheme. It will not be used to work out how much VAT you need to pay once using the scheme.
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11%, 10% in first year, you can only claim back VAT on capital purchases over £2000.
If your overheads are quite low, or your main expenditure is on wages which is not vatable then this is the way to go.
However once you reach the upper limit £185,000 then you have to revert to standard VAT scheme.
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The flat rate scheme also cuts down on paperwork and time, i can definitely recommend it ;)
Chris
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Chris,
Have you found that overall you saved money on this, taking into account you cant claim any VAT back on purchases.
Also, if think I was told on here but I cant remember who said but - if you register under 'cleaning services' the flat rate is 11%
but if you register as a window cleaner it doesnt fall into a category so comes under 'others' which is 10%
AL
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From my limited understanding it is simple to administer and gives you peace of mind that you are legal. Those are the benefits.
There is a calculater on the tax website where you can check which scheme would be better for you. I' m pretty sure thought the answer will be flat rate.
Other things to consider. T/O 60K pay nowt. T/O 70K pay 7k. If was making the decision there must be a point where you are better off.
One other thing to remember. the amount that you pay comes off T/O for tax purposes. This is a concession apparently. So for the sake of argument that 7k quoted above would have had personal tax payable on it anyway - so you are not 7k worse off, you are 7k minus your the appropriate rate that you would have paid tax on it as an income surplus.
Sorry if I have confused things this is just my personal view. Take expert advice or look on the website.
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VG
Thanks for that, I see what your saying about 'just under vs just over' but im hoping to keep growing so I think I'll just bite the bullet and get it over with!
Cheers Mate
AL
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We registered for vat on the flat rate scheme and its the best thing we have done.
We pay employers tax ni and liability. Our window cleaners are all licensed and insured and we felt it was only right to register for vat.
If you want to become successful within the commercial cleaning business you must be legal, professional and above all prepared to play things straight.
We have gained a great deal of extra business since registering with the vat man. It seems to give the client extra assurance that you are serious about what you do, experienced and trustworthy. As for paperwork a quarterly return completed with ease and a cheque sent in the post and thats that.
We "keep" the vat for three months then pass on 8.5% to the vat keeping the other 9%. And we claimed back back the full deposits on our last two new trucks.
Why anyone tries so hard to avoid registering is beyond me. If you are approaching or have surpassed the threshold be honest be clever use one of the few good things the Revenue offers us.
cheers
Gordon
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We "keep" the vat for three months then pass on 8.5% to the vat keeping the other 9%. And we claimed back back the full deposits on our last two new trucks.
Hi Gordon,
How does that work with the 8.5%, and how did you domestic customer (if you have any) react to the hike in cost
Regards
Al
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Hi Alistair
we don't do any domestics anymore so can't answer how they would react but the commercials who we had before registering understand that now we have no option but to charge the vat. Only one had a concern and they are a national charity but we met with them and our accountant and its all smooth now.
The 8.5% we get to keep is because on the flat rate scheme we do not claim for fuel vat nor any office supplies etc. Instead the Vat man allows us to keep the 8.5% as a flat rate and its swings and roundabouts. But the huge benefit is no paperwork, no recording of every little receipt for vat.
Before we registered we couldn't claim for any Vat relief anyway but now we keep an extra 8.5% of all invoices .In real terms we are able to make 8.5% more than last year for the same work.
Hard to explain but easy to do, thats the beauty of it, not all government departments are against you some do understand how hard it is to run a small business. The other benefit is any new purchase over £2500 and you can claim this vat back too.We claimed for the last two vans and even the vat on Glyns Gutter Vac.
Check the tax site for better info. I highly recomend registering.
Cheers
Gordon
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Alister what flat rate are you using 11% , 10% or 9 % , are you on your first year ?
In one post you said you keep 9% and on another you said 8.5%