[Marc Whitbread]

In need ofsome advice off people who are near or have gone over vat threshold please!

I am getting pretty close to threshold at the moment. I am full time and I employ a guy 3-4 days per week depending on work load. the problem I am having is getting the right balance! I'm lucky with the guy I have at the moment but don't want to take on more than 2 people ideally any help from people in the same position/have been advice would be much appreciated! many thanks

[Smudger]

We are vat reg and opted to take the flat rate scheme which is 11% on turnover but you don't claim back any vat unless its over 2k spent on one receipt. I think you have to make a decision, if your business plans are growth then you don't want to be just over the threshold you want to push well over it, if its close and you don't want to go over you need to cull some of the less profitable work so you don't - But we were not frightened of the vat as we knew we would work really hard and we WANTED to employ and grow more and we knew that to do this we could not keep below the vat threshold unless we looked at franchising, but at this time this is not what we wanted to do.

HTH

Mrs Smudger

[Tom-01]

Smudger what is your turnover then if you have gone way past the threshold? I agree with what you say that to make it worthwhile you need to go over by a considerable amount.

[Marc Whitbread]

Many Thanks Mrs Smudger that's the route I would  take if I go VAT registered my main worries I guess are finding the right people to do the job! did you add VAT onto your customers when you registered or absorb it? 

[Total shine cleaning services]

Very similar position Marc except for the fact my employee is full time, I've just tendered and been successful in gaining a prestigious pest control contract, however there procurement officer has just come back and has said we need to go vat or he's not allowed to give us this, have a time slot booked with my accountant on Monday to discuss, my problem is I have 5k a month coming in from the window cleaning but 95% of this is domestic, the contract I have nearly gained is for 6k and the duration is 2 years, this is for 12 visits a year and a quarterly visit on top to do a bit of carpet spraying, it's a real step in the right direction for this arm of our business but if the sums don't stack up I may have to turn it away, so this is year 4 of us trading and say we get this contract then our turnover is going to be around the 70K mark, had a business consultant person I knew work out my bottom line and with my fixed and variable costs I need £1069.00 a week as my break even point, this totals £55,558 a year and I'm not paying myself a lot of money as part of my growth plans for the first five years of trading, so if I do go vat the profit left in the company that I usually invest in newer better kit, training courses etc will be swallowed up by the vat, decisions to be made, it's lonely at the top..! Darrin and Smudger, I would be interested in any advice you could offer on this, Brain race and not much sleep over the last few nights lol

Thanks

Graham

[Smudger]

Hi Marc, we tried to keep one step ahead, we knew we would have to go vat registered in 2014 (providing we hit our targets) the year before - so when we do our annual price review - we only moved those who really needed it, knowing that when we did it in 2014 nearly everyone would have an increase - and we able to say "first rise in two years" to most - so this helped us absorb some of the increase when we went VAT at the same time. Try to get some more commercial work as this will help offset the vat as you charge 20% but pay 11% - so theres a bit of help there if you can pick up some commercial work.

[Smudger]

Graham, ,you probably know this - so sorry if you do, but if you go on flat rate scheme you will pay 11% vat and commercial contracts will be billed 20% so it may help you offset it a bit, if its a big step in the right direction, go for it, one good prestigious contract could help you lead to more commercial work - good luck Mrs Smudger

[Total shine cleaning services]

thanks for the reply

Graham

[supernova77]

Very similar position Marc except for the fact my employee is full time, I've just tendered and been successful in gaining a prestigious pest control contract, however there procurement officer has just come back and has said we need to go vat or he's not allowed to give us this, have a time slot booked with my accountant on Monday to discuss, my problem is I have 5k a month coming in from the window cleaning but 95% of this is domestic, the contract I have nearly gained is for 6k and the duration is 2 years, this is for 12 visits a year and a quarterly visit on top to do a bit of carpet spraying, it's a real step in the right direction for this arm of our business but if the sums don't stack up I may have to turn it away, so this is year 4 of us trading and say we get this contract then our turnover is going to be around the 70K mark, had a business consultant person I knew work out my bottom line and with my fixed and variable costs I need £1069.00 a week as my break even point, this totals £55,558 a year and I'm not paying myself a lot of money as part of my growth plans for the first five years of trading, so if I do go vat the profit left in the company that I usually invest in newer better kit, training courses etc will be swallowed up by the vat, decisions to be made, it's lonely at the top..! Darrin and Smudger, I would be interested in any advice you could offer on this, Brain race and not much sleep over the last few nights lol

Thanks

Graham

Graham,

I notice that you have a completely different limited company setup for your pest control services...

This makes sense as cleaning services and pest control aren't really related...

In that case why can't you just register for VAT with your pest control business and not your cleaning services business?

Andy

[Alex Wingrove]

Very similar position Marc except for the fact my employee is full time, I've just tendered and been successful in gaining a prestigious pest control contract, however there procurement officer has just come back and has said we need to go vat or he's not allowed to give us this, have a time slot booked with my accountant on Monday to discuss, my problem is I have 5k a month coming in from the window cleaning but 95% of this is domestic, the contract I have nearly gained is for 6k and the duration is 2 years, this is for 12 visits a year and a quarterly visit on top to do a bit of carpet spraying, it's a real step in the right direction for this arm of our business but if the sums don't stack up I may have to turn it away, so this is year 4 of us trading and say we get this contract then our turnover is going to be around the 70K mark, had a business consultant person I knew work out my bottom line and with my fixed and variable costs I need £1069.00 a week as my break even point, this totals £55,558 a year and I'm not paying myself a lot of money as part of my growth plans for the first five years of trading, so if I do go vat the profit left in the company that I usually invest in newer better kit, training courses etc will be swallowed up by the vat, decisions to be made, it's lonely at the top..! Darrin and Smudger, I would be interested in any advice you could offer on this, Brain race and not much sleep over the last few nights lol

Thanks

Graham

Setup a new business. And go VAT registered with it

Its so different from window cleaning you wont have an issue with the VAT man, if in doubt give them all call. They are very helpful and not scary

[Alex Wingrove]

Very similar position Marc except for the fact my employee is full time, I've just tendered and been successful in gaining a prestigious pest control contract, however there procurement officer has just come back and has said we need to go vat or he's not allowed to give us this, have a time slot booked with my accountant on Monday to discuss, my problem is I have 5k a month coming in from the window cleaning but 95% of this is domestic, the contract I have nearly gained is for 6k and the duration is 2 years, this is for 12 visits a year and a quarterly visit on top to do a bit of carpet spraying, it's a real step in the right direction for this arm of our business but if the sums don't stack up I may have to turn it away, so this is year 4 of us trading and say we get this contract then our turnover is going to be around the 70K mark, had a business consultant person I knew work out my bottom line and with my fixed and variable costs I need £1069.00 a week as my break even point, this totals £55,558 a year and I'm not paying myself a lot of money as part of my growth plans for the first five years of trading, so if I do go vat the profit left in the company that I usually invest in newer better kit, training courses etc will be swallowed up by the vat, decisions to be made, it's lonely at the top..! Darrin and Smudger, I would be interested in any advice you could offer on this, Brain race and not much sleep over the last few nights lol

Thanks

Graham

Graham,

I notice that you have a completely different limited company setup for your pest control services...

This makes sense as cleaning services and pest control aren't really related...

In that case why can't you just register for VAT with your pest control business and not your cleaning services business?

Andy

This is was I was trying to say, but Im too tired to type

[Total shine cleaning services]

would you set up as two ltd companies or go sole trader on the windows .? also when I hit 81K turnover between both businesses do I have to charge vat on the window cleaning business also?

Graham

[Smudger]

There is a fine line here weather or not the tax man will 'perceive' you are trying to avoid paying vat/tax.

2 separate businesses means just that, different phone lines, separate computers, Independant office/storage/vehicles etc...

If that's the case between windows and pest control then you'd be silly not to.


Darran

[Soupy]

If you could post videos on here I'd post one. Of me. Doing the ask an accountant dance.

You'll get some good advice on here, there are some knowledgeable people knocking about. You may also get some bad advice, there are also some divs knocking about. A good accountant will save you more than they cost.

[Total shine cleaning services]

cheers for the replies all
I have two seperate vehicles, my employee does 90% of the window cleaning round, my van t350 is geared up for windows, pressure washing and pest control.
will post back after talking to the accountant

Graham

[Alex Wingrove]

cheers for the replies all
I have two seperate vehicles, my employee does 90% of the window cleaning round, my van t350 is geared up for windows, pressure washing and pest control.
will post back after talking to the accountant

Graham

And the VAT man

Talk to the VAT man. I spoke to my account, she said oh no you cant do that.

Spoke to the VAT man, he said he it was fine, and explained exactly what I needed to do.

[Total shine cleaning services]

thanks Alex