[clive]

Has anyone recently gone VAT registered. Desperately trying to stay below the threshold but struggling so was wondering if anyone had taken up the flat rate VAT scheme.
Anyone gone VAT registered and wisshed they hadn`t?

Cheers,


Clive

[Shaun_Ashmore]

I know one cc who is on it, I believe that in your first year you charge the customer 9% and you can only claim back vat on larger purchases of above £2500, on the second year and so on it is 10% and same applies with vat back.

Vat can also be clawed back from purchases of over £2500 upto 3 years previous.

Also don't know if there is a ceiling on this as fro when you charge 17.5%.

BUT please check with your accountant first.

Shaun

[Nigel_W]

Clive,

I have been VAT registered for the past 17 years. Don't do it unless you absolutely have to especially if your clients are mainly residential. You are immediately 17.5% more expensive than you were and still competing against other non vat registered businesses.

You do gain with claiming back your input tax but this is usually minimal in comparison with output tax. I am not in the flat rate scheme but I have opted for an annual accounting scheme.

If you have to do it - get your marketing plan out of the drawer............

Nigel

[Shaun_Ashmore]

Also if you claim back your VAT you'll probably get taxed on it.

Shaun

PS Clive you need a nice long holiday, have you tried golf?

[clive]

Thanks for you replies. Got three holidays booked this year Shaun. Spain, Spain and Portugal!

Clive

[Ian Rochester]

We have recently gone VAT registered and have yet to submit our first return, my accountant is looking at the various options at the moment to decide on which is best for us.

Whichever way, it is still a big bill that needs to be paid!  However, if you want to grow the business then you have no (legal) option but to go VAT registered.

In hindsight, I would like to see them get rid of the VAT threshold all together, so everyone was playing off the same level.

(Says a man who now has to charge 17.5% more than his competitors!!! )

[Derek]

On the flip side many commercial customers will not deal with you unless you are VAT registered

[mark_roberts]

Im on the flat rate scheme.

As Shaun says although the upper limit before you must go to 17.5% is from memory £120,000 turnover.

Its easy to raise prices by 10% to cover it although you are missing out on claiming VAT on purchases.  This isnt a big problem due to the nature of our labour intensive businesses.

Although you only give the VAT man 10% you are totally allowed to charge 17.5%.  The 7.5% you 'make' is for offsetting purchases VAT.

If you do lots of commercial you may actually make more money.

VAT form is easy to fill in after you have done it once.

Also when you start you can claim for purchases over the last three years over  £2500 ie. van, TM etc, so the VAT man may actually owe you money.  NICE.

Mark

[brights cleaning]

shaun is right
i've gone on the flat rate scheme and put up my prices by 5%
because im getting through so much more work, so much quicker with my truckmount then i don't see a problem
i think once you reach £150,000 per year then you have to go on the full 17.5 % rate, but not sure
as for pricing against competitors, well i don't see that as a problem, its up to me to convince my clients that i am better the everybody else, if i fail, then that is my problem, but i don't fail very often
going VAT is a pain but if you want to gro your business then there is no way around it, so bite the bullet and just go for it

[brights cleaning]

p.s im probably owed about 9 grand from the Vat man over the last three years, so that will be nice
not sure weather that is taxable but i dont think it is.