[Lee Burbidge]

I am seriously interested in you guys opinions on this subject. As you will know, VAT becomes compulsory if your earnings far exceed 77k per annum.

This can create an unfair advantage in the market place as as soon as this threshold is achieved by a window cleaning business as a business cost would then increase by 20%.  Would have to absorb the cost and be happy at that because your earning enough or ask your customers to pay 20% more overnight?

What would a customer think if you increased the window cleaning cost by 20% because of VAT? Do you tell them?

Is it an unfair advantage compared to those happy to earn less than 77k IUO ?

This topic is probably more geared to the window cleaner who wants to build a business in window cleaning but super interested in the opinions of window cleaners happy at where they are making a living or running a maller venture.

 

[Paul Clapham]

Lee its based on £77,000 Turnover not earnings, but I am sure you knew that !

Its not worth the hassle of registering if you are only just going to go over the threshold you really need to jump from the £77,000 to at least £100,000+ mark to really make it worth while, (eg taking on another company)

20% increase  is a big hit for a customer , I think a lot would not be very happy in the present economic times
 
Also trying the De-register for VAT  ( if your turnover drops back below the threshold ) and HMRC are ALL OVER YOU really not worth the hassle for a one man operation


I personally think George missed a trick at the last budget he should have raised the threshold by £10 / £15 thousand to help small business who want to grow.   

[Simon@ Clearview contractors]

As Paul has said, good luck in the 20% rise with the customers, or alternatively you absorb the hit.

I personally would cull or sell some of the lesser priority work off and stay just below.

That's just my take, you may have a masterplan that your keeping quiet about there...

[david washbrook]

Lee
I have just gone vat registered (8/3/13) and so far it's been ok for me what I have done is put all commercial up by 20% and then gauged my domestics some have gone up 20% and some 10% but because I can claim vat back I don't mind loosing out on the odd domestic

Another plus is you can claim vat back on all equipment and vehicals spent over the last 4 years

[Simon@ Clearview contractors]

Lee
I have just gone vat registered (8/3/13) and so far it's been ok for me what I have done is put all commercial up by 20% and then gauged my domestics some have gone up 20% and some 10% but because I can claim vat back I don't mind loosing out on the odd domestic

Another plus is you can claim vat back on all equipment and vehicals spent over the last 4 years

Even prior to registration???  Sounds too good t0o be true this...

[david washbrook]

Yes if you brought a new van 3.5 years ago and still have it with a recite showing any vat paid then you can claim the vat back and the same goes for all equipment, also vat on any servicing in the last 6 months and all vat paid in the last 3 months prior to registration

[Total shine cleaning services]

been discussing this with my accountant and by the time you claim back what you can claim and offset it to what you pay you're about 12-13% out of pocket, we're gonna phase in a 10% rise prior to this, our main reason for going is to grow as big as we can, like others said if we were only gonna stick to one extra van we would keep below the limit but we want to grow and this unfortunately is one of the hurdles.

Graham

[david washbrook]

Graham in theory your turnover should go up by 20% and your profit should increase by approx 8% this is because your customers should pay 20% more thus increasing turnover you then claim back vat paid out fuel, equipment ect thus leaving approx 8% difference eg profit

This is how it should work in theory but in practice will proberbley be different hope it works out ok for you as I said before so far so good for me

[PAUL ERITH]

I love topic's like this all the self proclaimed big multivan operations on here yet only a few are vat registered 

Paul

[Smudger]

I love topic's like this all the self proclaimed big multivan operations on here yet only a few are vat registered  

Paul

they are Paul - they just know how to hide their monies better than you nd I !!  

Darran

[Lee Burbidge]

Lee its based on £77,000 Turnover not earnings, but I am sure you knew that !

Its not worth the hassle of registering if you are only just going to go over the threshold you really need to jump from the £77,000 to at least £100,000+ mark to really make it worth while, (eg taking on another company)

20% increase  is a big hit for a customer , I think a lot would not be very happy in the present economic times
 
Also trying the De-register for VAT  ( if your turnover drops back below the threshold ) and HMRC are ALL OVER YOU really not worth the hassle for a one man operation


I personally think George missed a trick at the last budget he should have raised the threshold by £10 / £15 thousand to help small business who want to grow.   

Good points.... t/O is correct lol

[Lee Burbidge]

Lee
I have just gone vat registered (8/3/13) and so far it's been ok for me what I have done is put all commercial up by 20% and then gauged my domestics some have gone up 20% and some 10% but because I can claim vat back I don't mind loosing out on the odd domestic

Another plus is you can claim vat back on all equipment and vehicals spent over the last 4 years

Awesome Dave!

[Lee Burbidge]

Yes if you brought a new van 3.5 years ago and still have it with a recite showing any vat paid then you can claim the vat back and the same goes for all equipment, also vat on any servicing in the last 6 months and all vat paid in the last 3 months prior to registration

So thats good if you can make your plans work that way   

[Lee Burbidge]

been discussing this with my accountant and by the time you claim back what you can claim and offset it to what you pay you're about 12-13% out of pocket, we're gonna phase in a 10% rise prior to this, our main reason for going is to grow as big as we can, like others said if we were only gonna stick to one extra van we would keep below the limit but we want to grow and this unfortunately is one of the hurdles.

Graham

Graham the difficult thing is that window cleaning requires very little out put. There is your fuel of course you can off set VAT on but once your cloths and wfp equipment has been purchased the back you claim back serves only to reduce the VAT bill you have to pay each period. Personally I like how Dave tackled it. But the real question is do you think that VAT provides an unfair advantage to your business? Should it be exempt on residential work? What do you think bud?

[Neil Gornall]

VAT is a pita but its a necessary evil if you wish to grow.

Don't forget to ask your accountant about only paying FLAT RATE VAT. you charge at 20% but only pay at the level advised. usually around 12%

And don't forget to put the cash to one side to cover those 3 monthly's. Mr Vat man hates it when you tell him your skint :-)

[formb]

http://www.hmrc.gov.uk/vat/start/schemes/flat-rate.htm

[david washbrook]

Lee the reason I registered for vat was because I. Had 2 businesses I doing carpets and. 1 doing windows then I brought another carpet cleaning company and trying to keep them all separate was a nightmare so my accountant advised me to put them all together and register, and so far so good it's also a hell of a lot eaisier to control

I does make it harder to compete with those who arnt registered but as I said I'm gauging mine and some but not all pay the extra but also because my out goings are fairly high I'm able to claim a lot of vat back

Also as said in post above I think ALL businesses should be made to register it would also stop a lot of fiddling from those who try and avoid it and also make it a fair competition across the boadd

[Total shine cleaning services]

back to the original question, am I right in assuming you don't always get the increase you want out of your domestics prior to going registered..? therefore it's quite a big leap if you are mainly domestic, but you limit yourself if you sit under it, I know what you're saying lee, we are quite limited to what we can claim back to what we will be giving the taxman but I personally want to grow my business into a sizeable one so havo no choice

Graham

[Dean Taberner]

We are flat rate VAT.

Got to be in it to win it.

[Lee Burbidge]

VAT is defo what you will attract if your a growing business.....