Clean It Up
UK Window Cleaning Forum => Window Cleaning Forum => Topic started by: andyatkinson on March 01, 2009, 03:33:00 pm
-
Is there anyone out there who consciously stays under the vat barrier and structures their business in such a way to stay under vat threshold ie subbing out work etc to take the little bit of income, for no or little work of your own and have lots of little bits of income coming in etc.....
-
I asked the same a few months back, didnt get a great response :) But i understand where you are coming from, you can do as much as you can a week, the make another few hundred quid on top by renting, subbing, selling work... This will keep you under vat but earn you a nice few quid :) If you have alot of comercial work however i would not be scared of the vat threshold, and some have even managed to go over vat in domestic too so if you are building your business so big i dont see why to be afraid of vat?? Certainly if you can get enough work and clean enough to earn that much - you will be well capable of handling a business over the limit :)
There are of course many "dodgy ways" of keeping below the limit, but i wouldn t recommend them as its too much of a risk!!
-
thanks for reply mate, i actually make some of my best money on my cheapest work, flats / bungalows etc and sounding out my customers it would make a difference to an oap's pocket, and although i have a great relationship with all my customers i dont want to leave myself open to under cutting etc if they feel there backs against the wall as i recently put my prices up.
-
thanks for reply mate, i actually make some of my best money on my cheapest work, flats / bungalows etc and sounding out my customers it would make a difference to an oap's pocket, and although i have a great relationship with all my customers i dont want to leave myself open to under cutting etc if they feel there backs against the wall as i recently put my prices up.
you have a choice if you getting to this limit, either swollow the vat, or ramp prices, the second being not a very good option at the moment
-
I would take the risk of putting prices up by ten percent and taking the other 5 or so on myself, but look for more work and stick the 15 % on, you cant be wanting to go over the vat threshold by a few quid? You must be looking at going waaay past it? In which case a few old ladies dropping off your list isnt that big a deal in the grand scheme of things but if you handle them properly, tell them you have to go vat and you are not passing it fully on to them etc you might not lose any..... Its either that at sit pretty under the threshold for the rest of your career... i dont know how you work but if you are pretty much a sole trader then its a good wage, if you employ and have potential to turn much more work over then do it, but you will have to see vat as some thing you have to work with and cost for it accordingly or else you cannot grow your business legitimately... Good luck anyway
-
thanks guys
-
if you decide to put the prices up to compensate. DONT tell the customer its for VAT, I learnt the hard way.
-
you could go on the flat rate of 10% first year then 11% there after.
if you can charge some commercial the vat and take the vat into your price in some residentail you will end up pretty even.
-
what was the cause of the bad reaction lee?
-
Andy. I think its peoples perception of window cleaning. we all know we are trades men the same as all the others but i think the public still see it as a job done by loosers or moonlighting fire men. As a result they resent paying VAT, remember they cant claim it back like a business can unless they are self employed and work from home themselves.
In addition, only very few window cleaners are VAT registered therefore the customer can simply go and get someone else and save themselves some money. when we registered for VAT i lost a few customers to it and so i decided to just take the hit (domestic only) and expand quickly to compensate, once you get from 61K-80K its fine so dont hang around in that no mans land of turnover for very long, after that VAT can become a positive thing on the purchases you make. It also makes you look better in eyes of commercial customers.
-
You guys are lucky...All trades here in Holland are VAT registered from the word go...
Cheers
Dave.
-
same here :'(
-
thanks a lot lee, thats really helpfull, i think im gonna hover around the threshold for a little while and then plan the jump properly, good advice, thanks for your time
-
If you have two different sorts of work you can legitimately have two businesses.
I have my own work that I do, but I also have a seperate business for work that others do for me as subbies. So I don't have to worry about slipping into Vat territory, particularly for work that makes me v little profit...
My accountant suggested it. The additional accountancy work costs almost nothing
He also told me a story of a family who ran a chippy as 5 seperate businesses with 5 sets of books, the revenue went mad!
So there must be a difference between the two businesses or they will get you.
-
lee02 how did you find adding the vat to management companies?
has the res assoc dont pay vat has there non profit i can see this being a problem
what were your experiences?
-
If you have two different sorts of work you can legitimately have two businesses.
I have my own work that I do, but I also have a seperate business for work that others do for me as subbies. So I don't have to worry about slipping into Vat territory, particularly for work that makes me v little profit...
My accountant suggested it. The additional accountancy work costs almost nothing
He also told me a story of a family who ran a chippy as 5 seperate businesses with 5 sets of books, the revenue went mad!
So there must be a difference between the two businesses or they will get you.
Id something similar to this or set up another business in family members name and sub the work to it.
-
lee02 how did you find adding the vat to management companies?
has the res assoc dont pay vat has there non profit i can see this being a problem
what were your experiences?
Hi Ronnie.
Yes I know what you mean and this is a bit of a grey area, we do do this work.
At the end of the day any business that is larger than one man is usually vat registered. companies like those know this, and are likely to be used to paying vat for many other services they recieve, in this case window cleaning is no different. personally i have not found it to be a problem but then im sure like with many things there will always be one exeption.
in the big scheme of things it is better to grow your business past the vat threshhold and earn more money, so many small businesses fear that jump and then stop growing, overcoming these issues is all part of the fun of running a sucesfull business. Being a good entreprenue is about finding solutions to these little issues. if some jobs you aproach dont want to play ball, then so be it. theres always one just around the corner that will.
-
my struggle seems to be at the moment getting the second man and second van this would mean more outgoings but with me working less but allowing me to use my time to grow my business.
but then it will obviuosly mean tighting my belt and there will be vat boom iv gone from making a goo d profit to struggling ....if you understand what i mean?
-
ronie ,if you want to grow your buisness ,you must look beyond the next step.
otherwise keep it simple and earn a good living as a sole trader.
-
If you have two different sorts of work you can legitimately have two businesses.
I have my own work that I do, but I also have a seperate business for work that others do for me as subbies. So I don't have to worry about slipping into Vat territory, particularly for work that makes me v little profit...
My accountant suggested it. The additional accountancy work costs almost nothing
He also told me a story of a family who ran a chippy as 5 seperate businesses with 5 sets of books, the revenue went mad!
So there must be a difference between the two businesses or they will get you.
Just remember as a sole trader if one of your main business is vat registered then so will your second business regardless of gross on the second, its you thats registered not the business...as i unfortunately found out recently...
-
Trying a split otherwise is called artificial seperation, you can out it under a name of someone else, but if they live in same house or are related- or a partner and its same business type you still asking for inspection...
I dont know how the business you are talking about before in the chippy got away with that as i spoke to a tax advisor on my round and he said, one hairdressers was taking staff as self employed and they all filed tax returns to avoid vat between them, anyway, the inland revenue inspected and made them all liable as they had something in common - The Door!! Funny- point being, dont try pull the wool over as you might get a nasty surprise one day when you owe alot of money!! Try go with it, as lee says part of being in business is finding ways to work with these issues, if as a wc you are looking at vat then you are doing well - keep going dont avoid it, legitimately or otherwise!!
I used to want a way round it but some of the more experienced ones on here have built their business past the threshold so it is doable with some thought, and more hard work !!