[diamond]

I know its probably been talked about before, but I am trying to weigh up the pros and cons of going vat registered.
I am looking at getting a new van and this might give me the shove to get registered.
I do quite a bit if commercial work and am trying to get into more high end houses as well.
How many have elected to get vat registered.
Ta
Alastair

[derek west]

don't you just get vat registered if you earn over 68k a year, might be more now after the election.
i know theres a scheme where you can if your under the threshhold where you pay 10% all though i could be wrong but other than that i don't really see the point unless you have to.

i'm no expert on this, just chunnering til i go out to quote for the day. no jobs boohooo.

[Doctor Carpet (Ret'd)]

Alistair

Derek's right. it won't help you, per se, but at best it may not hinder you.

Unless you are very near the threshold, then if most of your income comes from cleaning carpets and upholstery where there is very little input vat it won't be worth your while.

If most of your work is commercial then in many cases it won't make a significant difference as to whether you get the job or not.

If most of your work is domestic (high or low end) then vat simply makes you between 10% and  17.5% less competitive compared to most other carpet cleaners.

Roger

[MAX Carpets]

If your turn over is £68k or above, you have to go VAT registered, its the law. Its never really made a difference to us, just a bit more paperwork every quater.

[peter maybury]

A lot of organisations will not do business unless you are vat registered. Some of the breweries we have done business for, use your v.a.t. number as your approved contractor number. I have just quoted for a government department that has stopped using the last guy they used because he was not v.a.t. registered.
If you are quoting on big jobs it gives you little credibility to say you are not v.a.t. registered.
It is a double edged sword with domestic customers as they are unable to claim the v.a.t. back but you will have some who would perceive security in dealing with a "larger organisation".  You do have a 17 1/2 % price disadvantage against people that are not v.a.t. registered but a lot of people that are buying on price will go to the bottom end of the market anyway.
You do have the advantage of claiming the v.a.t. back on your purchases to compensate you, this can give you certain advantages in reducing your costs. 
Most people avoid it but I would not go back and de-register.

Peter
www.carpetcleanercardiff.com

[Paul W Jones]

There are pros and cons depending on the sort of work you do.  If you predominantly do domestic work then it's likely to get in your way.  If Mr Smith gets two prices of £200.00 to clean his carpets and one is 'plus VAT' then we know the one he is likely to choose.  However if you're mainly doing commercial work then it's unlikely to hinder you as the people you're working for are likely to be VAT registered anyway.

[Andrew Briscoe]

Looking at it the other way, mr Smith gets quoted 170.21 + vat = £200
and £200 off non vatted cleaner, Vat guy gets back all vat on his van, fuel, chemicals,phone,
advertising etc, and they make the same money !!

Andrew

[Paul W Jones]

Yep...pros and cons.  The VAT man also gets some though.

[peter maybury]

yes the v.a.t. man gets the difference between the v.a..t. you charge and the v.a.t. you pay you get to keep the v.a.t. you pay.
Very often people create their own markets. If you give the impression to people that you do not have the capacity to take on larger jobs then all your work will be domestic work and that is the way you will stay and you will never see the need to be v.a.t. registered.
I became v.a.t. registered about 20 years ago before I reached the threshold. It would have been much harder to reach the thresh-hold, if I had not been v.a.t. registered.
A lot of large businesses do not even know how to account for an invoice without v.a.t. on.  If you are v.a.t. registered you have the choice to discount to get a job you have that choice, if you are quoting for a job for somebody who wants to use a v.a.t. registered company and you are not registered you will not get the job.

Peter Maybury

www.carpetcleanercardiff.com

[JandS]

Presume you can only claim back "the dreaded" on things to do with
the business like fuel, chemicals etc.
Or can you claim VAT back off everything you buy?

John

[Jim_77]

Exactly the same as what expenses you write down in your accounts.....It's whatever looks feasible on paper

[hotsteam]

Could you set up two businesses one for domestic no Vat and one commercial with Vat,best of both ?
 : Regards Hotsteam

[Mark_Jubb]

Could you set up two businesses one for domestic no Vat and one commercial with Vat,best of both ?
 : Regards Hotsteam

I think you'll find Mr Vatman would soon been down on you like a ton of bricks, and you don't want that to happen.

[Joe H]

Would imagine no problem you having a business and your wife having another.

[peter maybury]

You do have to be careful doing that because there are issues with using equipment that you have claimed v.a.t. back on to do work that you are not charging v.a.t. I think our accountant called the term a conflict of interests. I did do it for many years with a business in my ex-wife`s name but things are a little different today. We have discussed it with the accountant and it would not be a problem if we use a different vehicle and equipment etc.
I would only do this if your accountant is confident that he is able to justify your position. If we go down that road again it will be in a different van with a different company name etc.
One thing that is worth mentioning is that if you register for v.a.t. you are able to claim the v.a.t. back on equipment that you bought up to 2 or 3 years ago.

Peter
www.carpetcleanercardiff.com

[Doctor Carpet (Ret'd)]

[quote authoNOTr=JandS link=topic=97543.msg845259#msg845259 date=1271008642]
Presume you can only claim back "the dreaded" on things to do with
the business like fuel, chemicals etc.
Or can you claim VAT back off everything you buy?

John

John

If you go the flat rate route you CANNOT  claim back input VAT apart from large capital expenditure. You can only claim back input VAT if you are registered in the normal scheme. But then paperwork becomes more complex and you have to pay VAT on jobs invoiced but not yet paid whereas the flat rate scheme allows you to pay only on jobs that have been paid-thus helping your cashflow.

Roger

[JandS]

Seems a lot of work for a little return.
That £100 job becomes £117.50.
Maybe just enough to tip the scales against
your price.

John

[Neil Williams]

Would imagine no problem you having a business and your wife having another.

They would have to be two totally different types of businesses. Carpet cleaning can't be different just by saying one is domestic and one is commercial.

[peter maybury]

As I said before I did it for 10 years with a contract division in My ex-wife's name. It is not something that you do at a whim we had separate vehicles and equipment etc. We accounted for it properly.
Peter Maybury
www.carpetcleanercardiff.com

[John Kelly]

Its perfectly legal but one of the businesses has to be a limited company. A limited comapny is an entity in its own right and even though you are the main shareholder you are classed as an employee as a director. You can't do it by having 2 sole traderships.