[Neil Gornall]

For a few years I stayed under the VAT threshold on purpose to avoid having to pay it, but then decided if I was to grow the business I had no choice.
For anyone in the same position I would say consider it very carefully. If like me most of your work is domestic, ask yourself if you can pass on the VAT to your customers or will you have to absorb it.
I doubt you will be able to pass it on to many if any at all, the competition is so great now that to tell Mrs Jones her £10 cleaning bill will now have to go up to £12 won’t go down very well and she will soon look elsewhere for a cheaper deal.  Your competition will clean up. (excuse the pun)
Commercial work is no problem as they will accept it without hesitation but can you afford to take a 20% hit on all your other work?
That quarterly VAT bill is a killer.

[William McCafferty]

Neil

Why didn't you go on the flat rate scheme that way you only pay 10%, depending on your spread of work between domestic and commercial, the commercial is charged 20% which can subsided the domestic

[idealrob]

I dont know you family circumstances, but you could give the business to your wife, or partner, and start a seperate business, even with a similar name. On one of our three busnesses, we did this, and VAT man approved it, as she was not a partner or director at the time. Just as if you sold the business to a non vat registered business, if it was under threashold, you would not have to pay vat

idealrob

[KS Cleaning]

I dont know you family circumstances, but you could give the business to your wife, or partner, and start a seperate business, even with a similar name. On one of our three busnesses, we did this, and VAT man approved it, as she was not a partner or director at the time. Just as if you sold the business to a non vat registered business, if it was under threashold, you would not have to pay vat

idealrob

My accountant has suggested something similair(more money for him).I have decided to get a few cookery books instead

[Dean Taberner]

I'm flat rate and in my 2nd year on the scheme,

We raise an invoice at 20% and pay the vat man 12% so pocket 8%. We don't claim back any vat unless it is on a purchase of £2000 or more.

Hope that helps,

Dean.

[Crystal-clear]

I'm flat rate and in my 2nd year on the scheme,

We raise an invoice at 20% and pay the vat man 12% so pocket 8%. We don't claim back any vat unless it is on a purchase of £2000 or more.

Hope that helps,

Dean.

so you actually earn with vat that way

[Dean Taberner]

Yes mate,

Good isn't it.

[richard jagger]

The3 problem with window cleaning as its mostly labor and it does not produce any input vat to offset the vat we charge. VAT  is great in retail.

[Crystal-clear]

Yes mate,

Good isn't it.

u make something very feared into fun elaborate further

Neil could most likly need some advice seems he aint having as much fun as you are!

[Dean Taberner]

Yes mate,

Good isn't it.

u make something very feared into fun elaborate further

Neil could most likly need some advice seems he aint having as much fun as you are!

Haha,

No, no. I certainly aren't having fun.

I'm actually quite distressed by it if I'm honest. 

[Neil Gornall]

Neil

Why didn't you go on the flat rate scheme that way you only pay 10%, depending on your spread of work between domestic and commercial, the commercial is charged 20% which can subsided the domestic

Sorry guys I misled you slightly, I used the 20% figure as that is the standard we charge out at but I am also on the flat rate scheme although not 10%, I wish we were as then we might at least break even.
My rate is 12%, but the point I was making is the same. with having so much domestic compared to commercial we certainly don't make money from the scheme. The problem is compounded each time I buy anything knowing I am paying the VAT but cant claim it back.
Personally I think the threshold should be about £5000, that way everyone would pay except those earning pocket money such as retired folk. at least then we would all be on an even playing field.
Pure HYDRO, if you are on 10% (please can you confirm that) then I assume that is agreed by the VAT man so therefore I am going to see if I can get mine reduced.
When I joined the scheme there was a massive list of occupations to choose from but window cleaning was not on it, I had to choose something similar (or rather my accountant did)

[Crystal-clear]

how come you aint claiming the vat back often? or only on large purchases i think do know the answer!, but might as well hear it from the horses mouth!, since you know the realism of being vat reged

[Neil Gornall]

how come you aint claiming the vat back often? or only on large purchases i think do know the answer!, but might as well hear it from the horses mouth!, since you know the realism of being vat reged

When you are on the flat rate scheme you can only claim VAT back on any purchase above 2k.
Which pretty much rules out everything other than your van.
So basically you gain a bit on jobs you charge but lose on jobs you don't and purchases.

The reality is, unless you have a high % of comercial jobs VAT will cost you a good chunk of your profit every 3 months. 

So if you are intent on growing your business be sure to factor it in otherwise it will bite you

[dannymack]

I'm vat reg and find it works for me as I'm on cash accounting and only pay vat on the paid invoices. I claim vat back on fuel and anything to do with work. It's nothing outta my pocket as I price the jobs up to what I want then just add the vat on which we pay 3 monthly bollox when u gotta send them a nice many thousands a quater sick really. Don't think it would work being domestic wouldn't know why u would go vat when u get cash mostly and don't have to declare .

[Neil Gornall]

I'm vat reg and find it works for me as I'm on cash accounting and only pay vat on the paid invoices. I claim vat back on fuel and anything to do with work. It's nothing outta my pocket as I price the jobs up to what I want then just add the vat on which we pay 3 monthly bollox when u gotta send them a nice many thousands a quater sick really. Don't think it would work being domestic wouldn't know why u would go vat when u get cash mostly and don't have to declare .

Err that will be due to the fact I run a legitimate and honest company.

[Rogue Trader]

flat rate for window cleaning is 12% - if you are paying 16% then you are paying too much - change it as quick as you can cos you are paying too much.

Dean you are not making 8% by charging 20% and paying the VAT man 12% because you are effectively paying VAT on VAT.

For example if you are charging a customer £100 he then pays you £120 inc £20 for the 20% VAT. At the end of the quarter you pay the vat man 12% of the 20 % VAT inclusive turnover,
 so for that £100 job you pay the VAT man 12% of £120 not 12% of £100.
 You are actually paying £14.40 vat on that job and not £12.
It seems like a better deal than it is and i spose is a clever bit of marketing by HMRC.

[William McCafferty]

Neil

Why didn't you go on the flat rate scheme that way you only pay 10%, depending on your spread of work between domestic and commercial, the commercial is charged 20% which can subsided the domestic

Pure HYDRO, if you are on 10% (please can you confirm that) then I assume that is agreed buy the VAT man so therefore I am going to see if I can get mine reduced.
When I joined the scheme there was a massive list of occupations to choose from but window cleaning was not on it, I had to choose something similar (or rather my accountant did)

Hi Neil

I am not vat registred yet and was quoting some old figures from last year I believe, I have a different game plan to tackle the vat problem.

Before I reach the vat limit I will give a franchise package to a employee and charge him/her 25% for the first 5 years, then 20% per year after that, if they want to or go over the vat limit then they have to register and pay it, but my franchising company will not need to go vat registered until I get to 5 or 6 franchisees.

The main cleaning company will go vat registred at some time, but the company will only cater for commercial clients so this will not be a problem, all domestic customers will be passed onto the franchisees.

I had a meeting with my accountant yesterday and outlined my plans, he didn't flag anything up.

[Frankybadboy]

Neil

Why didn't you go on the flat rate scheme that way you only pay 10%, depending on your spread of work between domestic and commercial, the commercial is charged 20% which can subsided the domestic

Pure HYDRO, if you are on 10% (please can you confirm that) then I assume that is agreed buy the VAT man so therefore I am going to see if I can get mine reduced.
When I joined the scheme there was a massive list of occupations to choose from but window cleaning was not on it, I had to choose something similar (or rather my accountant did)

Hi Neil

I am not vat registred yet and was quoting some old figures from last year I believe, I have a different game plan to tackle the vat problem.

Before I reach the vat limit I will give a franchise package to a employee and charge him/her 25% for the first 5 years, then 20% per year after that, if they want to or go over the vat limit then they have to register and pay it, but my franchising company will not need to go vat registered until I get to 5 or 6 franchisees.

The main cleaning company will go vat registred at some time, but the company will only cater for commercial clients so this will not be a problem, all domestic customers will be passed onto the franchisees.

I had a meeting with my accountant yesterday and outlined my plans, he didn't flag anything up.

you better get a move on then,

[William McCafferty]

why? am I in a race or something?

[Frankybadboy]

why? am I in a race or something?

start getting some more work in be a good help to yourself,