Clean It Up
UK Window Cleaning Forum => Window Cleaning Forum => Topic started by: Rogue Trader on September 09, 2009, 07:22:00 pm
-
The time has come for my customers to pay VAT on my services. I know someone who said to custies that because of the increased prices he will not put the price up again for another 3 years ..... i think that this sounds good as it will soften the blow ..... i reckon i can get away with £17 jobs up to £20 and £20 up to £23.50 - or £23 @ 15% and just about a £30 job up to £35 but a £40 up to £47 seems like a real big jump ....... I Also have jobs that are well priced , dare i say it , overpriced and i will take the hit on these jobs and as far as my records are concerned will reduce the prices to include the vat in the original price ......
Those of you that have gone VAT registered how many domestic big jobs of say £40 + have you lost kept (is it realistic to say to the customer that you will split the VAT with them?
Also does anyone have a copy of a letter that you have sent to customers informing them of VAT price increase.
Matt ;D
-
I was vat registered back in the nineties. Not wanting to put anyone off, but found it to be a bloody nightmare.
Getting your quarterly payments in to the government on time, and a general tax collector for said'government' without getting paid for it..
Any way its probably the way forward if you want to grow your business, but dont forget to tell your DOMESTICS that you will have to add the extra 2and a half extra percent onto the 15 per cent as it stands to-day, as apparently its going up to the 17.5 per cent again at xmas or just after, so it may well be worth waiting until it does go up to avoid any confusion. As you may know what will come next...............
W/C Your windows are going up 15 per cent to take account of the vat registering.
Custy. OK then (Add grimace look to custys face) >:(
W/C Oh and by xmas, they will go up another 2.5 per cent to 17.5 percent.
Custy. Oh oh.
W/C. Oh and by the way the price for the windowcleaning hasnt gone up for a while so its going up .50p......is that ok with you?
Custy I,ll give you a ring when i need you. :'(
Sorry mate if it sounds negative, but domestics cant claim vat back while commercial (shops factories etc) can, as most of them are vat registered.
OK i think i need a lie down :o ;D
-
I've decided its quite high on this fence i'm standing on so i think i'll come down off it :o
-
Matt
You may be better off setting up a second company that is not vat registered for houses.
Not got time to go through figures but, at some point you,ll be better off.
Gary
-
Matt
You may be better off setting up a second company that is not vat registered for houses.
Not got time to go through figures but, at some point you,ll be better off.
Gary
Exactly what i will do when the time comes.
-
but this is illegal if the company fitted carpets it would be fine but just cause on was commercial and one was residential does not mean they are seperate companies.
-
"You may be better off setting up a second company that is not vat registered for houses."
If only it was as easy as that.
HMRC have clamped down on this over the last few years.
Even if the second company is registered at a different address,
they will be on to you like a rash,
if they think its anyway connected to cleaning of any kind.
-
Matt
You may be better off setting up a second company that is not vat registered for houses.
Do not avoid registering for VAT by artificially separating business activities
If you run more than one business the sales in all those businesses must normally be added together to determine whether or not you must register for VAT.
However, if you are involved in the running of several separate legal entities, you may not need to combine the sales of those businesses to find whether you need to be VAT-registered.
If HMRC decides that you have artificially separated one business into smaller parts to avoid registering for VAT, it can decide that the entire business is a single taxable person and therefore must be registered for VAT. See the description of 'taxable person' in the section in this guide on who can and can't register for VAT.
Situations that HMRC may consider a single taxable person for VAT purposes include:
Separate entities selling to registered and unregistered customers. The VAT-registered entity sells only to VAT-registered customers, and the entity not registered for VAT sells to customers who are not registered for VAT.
The same equipment or premises being used by different entities on a regular basis. The premises and/or equipment are owned by one of the parties, who charges rent to the others. This situation may occur in businesses such as launderettes and takeaway food operations.
Splitting up what is usually a single sale. This is common in industries such the bed and breakfast trade, where one business supplies the bed and another the breakfast.
If you deliberately avoid registering for VAT, you may be liable to a penalty. For serious offences, the matter will be investigated and you may be prosecuted.
http://www.hmrc.gov.uk/vat
-
but this is illegal if the company fitted carpets it would be fine but just cause on was commercial and one was residential does not mean they are seperate companies.
Yep I can see Ronnies point, but at the same time if you pay for a carpet, say for example: £100 with the vat at 15%, the custy pays an extra £15.00 included in the price, as a one off payment. The custy can't do anything about it, but if the custy is paying £10, for example, for the cleaning of their windows they are paying an extra £1.50p every 2 weeks, or monthly, depending how often they get cleaned, equalling £11.50p as opposed to a tenner.
Now public being the public, they may choose to ignore this and pay £11.50p "cos my windowcleaners a nice lad," but you can bet your bottom dollar the majority will find a non vat registered windowcleaner and pay a tenner, especially in this climate.
God i'm so negative, i should be a bloody life coach. ;D
-
Oh and by the way, dont get me started on how...... "If you want to de-register for vat" because your earnings have dropped below the threshold. .Cos it aint easy!! The HMRC want to know why,!!!.... and its like the Spanish inquisition.
And no-one expects the Spanish inquisition! :o
-
Matt3 its all very well putting the prices up from £20 to £23.50 and telling them you wont put the prices up for 3 years, but what if the VAT is increased within those 3 years.
the government has reduced the VAT this year, but mark my words if they win the next general election it will shoot up to 20-22% to cover the loss in revenue from the VAT reduction.
Matt
-
welcome to my world. VAT is from day one here. There is a threshold of 15000 a year, but that's easy to exceed. However, splitting a business is alot easier, ask your accountant and see what is possible.
It can't be much different from the rest of EC countries surely? I am splitting carpets from windows. Here's a point that could be interesting, what if you have your WC business, and your wife has a hairdressing business. What happens to VAT being paid if both businesses don't exceed the VAT level, if you see what I mean?
-
welcome to my world. VAT is from day one here. There is a threshold of 15000 a year, but that's easy to exceed. However, splitting a business is alot easier, ask your accountant and see what is possible.
It can't be much different from the rest of EC countries surely? I am splitting carpets from windows. Here's a point that could be interesting, what if you have your WC business, and your wife has a hairdressing business. What happens to VAT being paid if both businesses don't exceed the VAT level, if you see what I mean?
Totally agree. Recently went on a course at my local tax office and asked the woman i couldn't possible pass on the VAT to my customers as they would just cancel sighting that "just cos you've got a successful business doesn't mean i'll cover the extra". SHE TOLD ME TO SPLIT THE BUSINESS!!!! to which I asked her if that was entirely legal....YES came the answer.
Still not to sure about this, but what ever i do i'll be doing it a hell of a lot sooner than when i get close to the threshold of £67,500 to avoid suspicion ;D
Damn......wonder if the local tax man takes a peek here every once in awhile!
-
The way I see it, if the customer wants a professional whether its an electrician, bricklayer or window cleaner they will have to pay VAT.
In this world you get what you pay for, if the company HAS to pay VAT then that will show the customer you are no cowboy and that you are a successful business.
Matt
-
hairdressers and window cleaners have now simalarities so there two seperate businesses window cleaning carpet cleaning would be a fine line and believe if they investigated you they would find you in the wrong, commercial and residential split would be a no no they would defo find you in the wrong IF CAUGHT
-
Ron
The tax man will either accept it from the start or he wont.
You tell the tax man you have 2 businesses, he reads what they both are then he makes a decision there and then.
if you here nothing after a month or so, you can take it as read that they have accepted it.
-
The way I see it, if the customer wants a professional whether its an electrician, bricklayer or window cleaner they will have to pay VAT.
In this world you get what you pay for, if the company HAS to pay VAT then that will show the customer you are no cowboy and that you are a successful business.
Matt
Being registered for VAT makes you no less of a cowboy, or a professional either! I know of many vat registered traders that I wouldn't touch with A BARGE POLE! ;)
-
Maybe so but the general presumption from a customer domestic or commercial is that to be vat registered you must be serious and professional! Just the way it is 99% of the time!
-
Oh i see ............so if i am not vat registered, that makes me a cowboy, not a profesional.
Oh well, i think i'll go voluntary vat registered, just to be good at me job!!!!!!!!
Just kidding lads................tongue in cheek an all that. ;D ;D ;D ;D ;D
-
I said the way it is viewed... not that it is the fact, the same people on ladders now are viewed as not serious although some are doing a much better job than those with wfp and vice versa, its not about the facts it is what is percieved by potential custy !
-
With VAT likely gouing up to 20% after the next election I dont see many residential customers being willing to pay that extra for a window cleaning service, and it makes it a lot harder toprovide a profitable value for money service.