[Flash..]

I am probably talking out of my Arse here but if you are VAT registered you claim back the VAT on expences meaning your overheads are lower, but you charge  VAT on your fees.

So if your overheads are lower as you reclaim the VAT your charges to the customer can be lower, but with the VAT added that will make them the same as before VAT registration?

This is probably wrong but its how I understand it??

[Walter Mitty]

I am probably talking out of my Arse here but if you are VAT registered you claim back the VAT on expences meaning your overheads are lower, but you charge  VAT on your fees.

So if your overheads are lower as you reclaim the VAT your charges to the customer can be lower, but with the VAT added that will make them the same as before VAT registration?

This is probably wrong but its how I understand it??

I may be wrong but that's pretty much how I understand it too.  However, if the main outgoing is labour - often the case with growing window cleaning firms, it's unlikely that VAT will be charged on that.  So it's mainly vehicles & maintenance, fuel, poles and filtering equipment i.e. getting relatively little VAT back compared to what you have to pay the VATman.  If you were, say, buying goods and selling them on, the differential would surely be much less.
Also, there would be a higher accountancy fee that would need to be covered.

[Perfect Windows]

Investigated splitting the franchise business and the cleaning business.

The VAT consultant said that the businesses were definitely different enough.  He also said that each business would need its own vehicles, tools, paperwork, computers and even broadband accounts.

He gave me the case of a plumber in (I think) Essex which had a commercial and a domestic business.  They were lumped together after HMRC found out that one of the businesses had been round the corner from the other and they had provided a spare part.

He said that if I split the businesses and was out cleaning and a franchisee in the next street needed a spare part, I'd need to come home, change out of my uniform, get into the car, take the part, come home, change back and go out in the van.

Since I had the chat with the VAT consultant, I just smile wryly when I hear the "split the business, it's simple "advice.

Vin

[PoleKing]

That's two different businesses. He's talking about splitting  the round to avoid registering for VAT.

I was asking for myself

I couldn't split my round up because the kit i was using wouldn't be solely used on VAT reg jobs.
Well, I could. The accountant said i could probably do it for a year. Maybe longer. But sooner or later they'd find out and call it tax 'evasion' rather than 'avoidance'. The kicker being, only one is illegal.
I could 'just about' get away with splitting the office cleaning and window cleaning. But she sort of frowned when i asked. Not a 'no' per se. But asking for trouble.

[Clever Forum Name]

I ain't splitting up anything was just wondering.

79,999 is more than enough for 7 months work of the year.

[8weekly]

I agree with the customer.

If my window cleaner tried to charge me vat he'd be finished & replaced with a none vat one. It's business, end of. I pay enough tax without the window cleaner collecting even more!

Most people won't find a £1.75 or so increase on their bill every month or two months such a hardship.

[ChumBucket]

I agree with the customer.

If my window cleaner tried to charge me vat he'd be finished & replaced with a none vat one. It's business, end of. I pay enough tax without the window cleaner collecting even more!

Most people won't find a £1.75 or so increase on their bill every month or two months such a hardship.

You shouldn't underestimate the "principle" factor. I wouldn't utter a word about paying VAT to domestic customers.

[Flash..]

I agree with the customer.

If my window cleaner tried to charge me vat he'd be finished & replaced with a none vat one. It's business, end of. I pay enough tax without the window cleaner collecting even more!

Most people won't find a £1.75 or so increase on their bill every month or two months such a hardship.

£1.75 would be the VAT on a £9 clean my average clean is about £15 so an extra £3 to the tax man, I personally would not pay it if there were alternatives

[ChumBucket]

I avoid vat at all costs where possible, apart from when it would be to the detriment of the service or product. I don't recall having ever failed to achieve a none vat purchase of equal or better standard to the vat charged alternative.

[8weekly]

I agree with the customer.

If my window cleaner tried to charge me vat he'd be finished & replaced with a none vat one. It's business, end of. I pay enough tax without the window cleaner collecting even more!

Most people won't find a £1.75 or so increase on their bill every month or two months such a hardship.

£1.75 would be the VAT on a £9 clean my average clean is about £15 so an extra £3 to the tax man, I personally would not pay it if there were alternatives

If you added 12% (flat rate) it would be £1.80 on £15.

[Tom-01]

Investigated splitting the franchise business and the cleaning business.

The VAT consultant said that the businesses were definitely different enough.  He also said that each business would need its own vehicles, tools, paperwork, computers and even broadband accounts.

He gave me the case of a plumber in (I think) Essex which had a commercial and a domestic business.  They were lumped together after HMRC found out that one of the businesses had been round the corner from the other and they had provided a spare part.

He said that if I split the businesses and was out cleaning and a franchisee in the next street needed a spare part, I'd need to come home, change out of my uniform, get into the car, take the part, come home, change back and go out in the van.

Since I had the chat with the VAT consultant, I just smile wryly when I hear the "split the business, it's simple "advice.

Vin

So is your franchise business VAT registered?

[Tom-01]

I agree with the customer.

If my window cleaner tried to charge me vat he'd be finished & replaced with a none vat one. It's business, end of. I pay enough tax without the window cleaner collecting even more!

Most people won't find a £1.75 or so increase on their bill every month or two months such a hardship.

£1.75 would be the VAT on a £9 clean my average clean is about £15 so an extra £3 to the tax man, I personally would not pay it if there were alternatives

If you added 12% (flat rate) it would be £1.80 on £15.

Exactly. You don't HAVE to charge 20% VAT. Like 8weekly said increase by 12% and pay flat rate 12%. Any commercial work charge 20%VAT and pay 12%. Still have to pay tax on the 8% but it all helps.

[david mark]

My accountant told me if you I hit the vat threshold it will cost me  £10,000 a year
 extra

[8weekly]

My accountant told me if you I hit the vat threshold it will cost me  £10,000 a year
 extra

Unless you pass it on, in which case it won't cost a penny. When I hit it, I will pass it on and will tell them. To be honest those that cancel because I have gone vat registered are the type of customer I don't want or target.

[SeanK]

My accountant told me if you I hit the vat threshold it will cost me  £10,000 a year
 extra

Unless you pass it on, in which case it won't cost a penny. When I hit it, I will pass it on and will tell them. To be honest those that cancel because I have gone vat registered are the type of customer I don't want or target.

It still costs as the extra your charging customers is going to the vat man and not into your pocket, so if you think about it
you could be charging these higher prices and not be vat registered.

[CleanClear]

It still costs as the extra your charging customers is going to the vat man and not into your pocket, so if you think about it
you could be charging these higher prices and not be vat registered.

Can you please stop stating obvious facts and let them believe being VAT registered is better, thanks !!!

[Soupy]

Being VAT registered isn't better. It's not really something you have a choice in after you've made the decision to grow beyond the threshold (it was 58k when I went past it).

Sure you can 'split the business' but unless you do it extremely well and know exactly what you are doing you'll end up worse off.

When we hit the threshold we put the prices up 10% which is about our normal increase. The flat rate then was 11% so we took a 1% hit.

As for not telling your customers, I have an inc VAT on all receipts along with my VAT reg number. No one gives a toss.

[8weekly]

It still costs as the extra your charging customers is going to the vat man and not into your pocket, so if you think about it
you could be charging these higher prices and not be vat registered.

Can you please stop stating obvious facts and let them believe being VAT registered is better, thanks !!!

You are making the mistake of thinking that going VAT registered is a choice. It isn't if you run a legitimate business and go over the threshold. Only a fool would choose to be a tax collector for the VAT man and only a fool would think that anyone would consider it desirable.

[PoleKing]

It still costs as the extra your charging customers is going to the vat man and not into your pocket, so if you think about it
you could be charging these higher prices and not be vat registered.

Can you please stop stating obvious facts and let them believe being VAT registered is better, thanks !!!

You are making the mistake of thinking that going VAT registered is a choice. It isn't if you run a legitimate business and go over the threshold. Only a fool would choose to be a tax collector for the VAT man and only a fool would think that anyone would consider it desirable.

It is a choice mate.
One chooses to go over the threshold if the work comes in.
Or deliberately stays under it, legally.
Perhaps by selling some work as the business grows.
Thereby choosing to stay under.
A lot choose to go over as they want to grow their business.
A lot choose to stay under for their own reasons.

[ChumBucket]

It would seem at times on here, people see it as some kind of achievement, something to boast about, not having a clue of the implications!! That's CIU!!