[Spursboy1972]

Yes the dreaded Vat.. Its looming and I don't think I can avoid it for much longer...

My question is this:- Did you guys (that are registered) pass on a) all the vat to the customer, b) part or none at all...

I have to say I am a little worried about the reaction and fall out to adding 20% to everything..

Constructive answers most welcome

Thanks

Tony

[PoleKing]

It's not 20% if you choose flat rate bud.
Have you looked at 12% flat rate?
You may even be able to absorb all of it?

[Spursboy1972]

Cool will have a look into it.. Going to send you email in a min

[steve rix]

get paid cash

[Spursboy1972]

I asked for constructive answers..

[J.D]

I was voluntary vat registered for a few years and added vat to all my customers prices. In most cases when pricing a new customer I would price a £10 house and the quote I would give to the customer would be £12.50! I never used the words plus vat to my customer , unless they required an invoice for each clean.

[AJ]

Using the flat rate, you still charge 20% but you can't claim back any VAT you have paid out.

so

you charge £10 + 20% vat = £12
you pay 12% on £12 but don't claim any of the vat back from your expenses.  £1.44 to the vat man, leaving an amount of £10.56. The 56p is towards the vat that you have paid out.

On the other hand, if you only charged 12% vat to the customer

you charge £10 + 12% vat + £11.20

you pay 12% on £11.20. which is £1.34, you will make a loss. Your £10 will only be worth £9.86

Tax doesn't have to be taxing, so they say  

[J.D]

The only true benefit I found to being vat registered is when it comes to leasing a vehicle for your business. Other than that it was just more paper work!

[Spursboy1972]

Unfortunately if it were a case of voluntarily registering then no way would I do it. However The rules state that if your turnover exceeds or is likely to exceed £81000 within the next 31 days you MUST register for vat..

[Smudger]

We felt that our current residential customers would not accept a straightforward 20% rise just for vat so we did the following

Monitored our turnover closely and predicted when we would hit the vat threshold on the rolling 12 month period, this allowed us to actively target commercial clients and charge the vat at 20% offsetting the 11% we would have to pay.

Also vat registration just about coincided with our price review so we were able for most residential customers put the price up this way most 10% some a little more although we don't see that rise it does mean the vat has been covered

Going forward vat isn't mentioned to residential customers other than on the quote sheet there is a box for the price then vat and total price, on quotes I price up add 20% and put the total price down.

Sometimes on the larger one off work people ask about vat, which I then tell them it's included, often at this stage we get some negotiation on price ending up with a hard fought (for the customer) 10% discount 

HTH

Darran

[Inspire Cleaning]

Also worth mentioning that you can claim back VAT on vehicles & equipment for the four years prior to you first registering if its the same company. I think I ended up with a £8k rebate on my first return. The back dating is only applicable to non consumable items, so you can't claim for fuel or consumables.

[Smudger]

Is it?

If so missed that one 

I know you can claim vat back on the flat rate scheme on purchases over £2000


Darran

[pdale]

From what I've seen of guys I have worked for it's difficult to pass the VAT onto customers if your prices are high end.

In my opinion the only way forward once you pass the threshold is to go massive. For every 4-5 vans you have on the road use one of those vans solely to cover the VAT bill. If you go over the threshold and stay at 2-3 vans the only person who'll end up covering the VAT is yourself.

[Inspire Cleaning]

Is it?

If so missed that one 

I know you can claim vat back on the flat rate scheme on purchases over £2000


Darran

You need a better accountant...........

Reclaiming VAT on goods you bought before registration

You can reclaim VAT on goods you bought or imported no more than four years before you were registered for VAT if all the following are true:
the goods were bought by you as the entity that is now registered for VAT (for example, the individual, business or organisation)
the goods are for your VAT taxable business purposes, which means they must relate to VAT taxable goods or services that you supply
the goods are still held by you or they have been used to make other goods you still hold

You can't reclaim VAT on any of these goods:

goods that you've completely used up before you registered for VAT (such as petrol, electricity or gas)
goods that you have already sold or supplied before being registered, or have used to make goods you have sold or supplied before being registered
goods that relate to supplies you make that are exempt from VAT

The word 'goods' includes goods that are intended for resale, and also goods that you keep as assets, such as computer systems, shop fittings, office equipment and furniture, tills, vans and other equipment. It also covers anything else you've bought that isn't a service, so it includes consumables such as stationery.

[Paul Coleman]

Never been VAT registered myself but passing on what I learned from someone else:

Starting off with the simplified form of VAT is fine if you intend to stick at thaty turnover level.  However, there is another, higher threshold level where the more complex VAT must be used - and this can bring complications of its own initially.  I can't back this up as I haven't been there but the feedback was that he wished he had done the more complex method from the start.