Clean It Up
UK Window Cleaning Forum => Window Cleaning Forum => Topic started by: Skyglide on February 06, 2008, 07:46:57 pm
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OK you must have been there. Loads of demand, don't want to register VAT. Can you set up a company with an employee and pay yourself a dividend? Keep all separate. Help please.
Chris
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are you the sole proprietor?
as I work with my son, the company has 2 directors. we pay ourselves a salary, along with the 2 staff. The company has its own seperate account and is taxed seperately.
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Alan
I'm the sole proprietor with one employee, having sacked two others. Want to keep this operation as is and under the VAT threshold. With new customers coming on board all the time want to have a separate company set up and again trade under the VAT threshold. Is this possible and practical?
Chris
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No its not!!
VAT comes basicly under your name so to speaki belive its not like tax were you could set up another busines to save tax.
so if you had one company turning over 55.000 and the other turning over 25.000 thats the total of 80.000 so you would pay vat.
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Chris,
Sorry but it's time to bite the bullet and go VAT registered, you can duck and dodge for a while, you can set up another business, it has to have different directors/owners, but you are getting on thinner and thinner ice!
Take the dive, go VAT registered, ideally go for FLAT RATE VAT, which means you only pay the vat man 10% of your turnover but you can't claim back vat on any of your smaller expenses.
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If you can establish that your two companies are totally seperate businesses. For instance they have different addresses, different vehicles, different main activity etc you can run them without VAT provided they both trade below the limit. If they are basically the same business split in two this is illegal. You will be caught and it's a huge fine and possibly prison. You may not be banned from running a company ever again. Not worth it IMO
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why oh why do people try to avoid vat its simple to organise and pay, the benefits can be good.
you are trying to approach larger customers and most of them you have spoken to will be interested by the size of your company and the benefits of using you!!
it amazes me the amount of large companies (or so called) but they are not vat registered.
grow a business not a cowboy firm, i know of some one thats now got HM customs
looking for them due to there cowboy business antics oh well one less to worry about i suppose.
rgds, stu
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It's just that we already pay 20% tax on income, so to then pay another 10% gross.....
To make it worthwhile legit you probably need to top ninety. And even then you might be better off as a one man band on 61k.
Several do the artificial seperation and hope for the best. The franchise splitting seems a good ruse they haven't wise'd up to.
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Working so hard can't quite see the wood for the trees.
Money and lifestyle is the aim, but why go for large if there is no real money to be made?
The franchising thing seems a good one. How do you do it?
Chris
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If in doubt just pick up the phone and phone the revenue and ask them.
If they accept your accounts then they are agreeing to what you are doing.
Your tax affairs are visible to them on the same screen so they either accept or they dont.
Its as simple as that.
I would advise anyone to seek independant accountant advice because everyones taxaffairs are different.
Dave
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hi chris, things must be looking up in milford,
i still recall our first meeting when you came to my house ref wfp
good luck m8
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grow a business not a cowboy firm, i know of some one thats now got HM customs
looking for them due to there cowboy business antics oh well one less to worry about i suppose.
rgds, stu
i wonder who that is stu ;)
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wonder too Jay! ;) ;)
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::)