[ChumBucket]

Crikey, is that all it is? Most on here will be past that by week Six of their trading year!!

[trippyboy]

I think the higher income tax comes in at approx 42 k thats after expenditure. That just pushes me slightly into the 40% tax band.
It needs to go higher in my opinion, maybe tax @ 20% for the first 60 k then 40% after that.

[NWH]

The only way I can avoid vat is being a one man band, if I took on someone else I would be in the vat threshold. Im allready a bit into the higher tax band, which in my opinion is unfair and is levelied too low.
seems the harder you work in this country the more you get shafted.

Nail well and truly hit on the head I agree with everything you've said.

[CLEANCARE WC]

I personally think it would be a lot fairer to step it... e.g.

- 42k =20%
42-52k =25%
52-62k =30%
62-82=40%

[Smudger]

 Seank - Don't be soooo touchy, just injecting a little humour ( sorry you took it the other way )

Yes, I look back at the first year or so of trading and it was so easy and straightforward then, simple tax return end of ! ( sometimes you look back and think that's better than all the differing taxes etc I'm dealing with today ) sorry you took that wrongly as well...

Thankfully Mrs smudger runs the office otherwise I simply wouldn't manage, I have no qualms with that.

Darran

[Tom-01]

Get yourself as much commercial work as possible,  you can make 9% ON  each contact  ( flat rate ), pass this on to your domestic customers

Is that legal

It isn't like it sounds. He just means use commercial work to offset the impact of not passing the VAT to domestic customers.

But how would it work, your paying the VAT man 11% and the commercial company will be claiming back 20%.

You'll be charging 20%, but if you're on the flat rate scheme you pay 12% and the 8% is "profit".

That's not the question the question is, what happens if the company you charge tries to claim back the 20% but the
VAT man has only received 12%. in other words will the VAT man be out of pocket.
While your at it please explain to Smudger that asking somebody a question does not mean your jealous.

Its correct what he says about the making 8 or 9 % on a VAT invoice, thats how it works (the flat rate scheme). Its not a gimmick or something, thats how its understood to work via HMRC website advice. The VAT man will be technically out of pocket, but the scheme is designed to make it easier for small buisness who operate on a cash basis to operate within the VAT scheme. Thats why its just simplified and based on a percentage of your turnover.

Even if you pay the flat rate, they will get their money out of you. Yes it looks better of course, but that 8% 'profit' you make you still have to pay tax on, and you can't claim VAT back on purchases under £2k. Whichever way it's designed for them to get as much money as possible. As my accountant explained, 'they're not silly'.

[8weekly]

Well no losses so far. Not everyone is getting 20%, and all customers in the last 6 months or so are on prices with the VAT factored in (though it'll be a shame to lose the 12%). So far so good. Here's one email from a 20% increase - Up from £95 to £114:

Dear Steve,

Thanks - this has been paid today.

Sorry to hear of the price increase, but glad if that means your business is growing!

Best wishes,


Thomas

[Rich Wilts]

The only way I can avoid vat is being a one man band, if I took on someone else I would be in the vat threshold. Im allready a bit into the higher tax band, which in my opinion is unfair and is levelied too low.
seems the harder you work in this country the more you get shafted.

Nail well and truly hit on the head I agree with everything you've said.

Nope. I don't. Trippy if you're only just hitting the higher tax bracket don't assume you'll double your income to hit the VAT bracket by taking on someone else. That'll mean doubling your income and that won't happen with just one more. Be that in the same van as you or in a second vehicle.

[trippyboy]

Matt if I took on someone else I would only do so with another van, two men one van is like throwing money down the toilet if you ask me, both would slow each other down.
I would expect any employee to turn over a min of 50 k per year even with holidays.
That 50k would easily push me in the vat zone meaning I would have to re design my business and start looking at the comercial sceene.
Im happy enough at the moment doing what I do on residential customer base.

[NWH]

1 person will make a fraction of a difference on your earnings I agree with that the thing it does as we all know is make the working week easier,i would say if someone said you'll be no better off you'll be earning the same but your only going to need to do half the work now most would take that lol. Thinking about it seriously and putting it all on paper it will be more hassle,maybe it's just me but I've chatted to a few windys over the past few weeks and they have all got employees who are all unreliable. Trouble is all there work now requires at least 2 to keep up with the work even on the pole.

[sunshine windows]

.     Nope. I don't. Trippy if you're only just hitting the higher tax bracket don't assume you'll double your income to hit the VAT bracket by taking on someone else. That'll mean doubling your income and that won't happen with just one more. Be that in the same van as you or in a second vehicle. 

Don't forget income tax is calculated on profit, whereas Vat is based on turnover. Because he's only just into the higher income tax bracket, doesn't mean his turnover couldn't already be verging on the £82k threshold

[Rich Wilts]

1 person will make a fraction of a difference on your earnings I agree with that the thing it does as we all know is make the working week easier,i would say if someone said you'll be no better off you'll be earning the same but your only going to need to do half the work now most would take that lol. Thinking about it seriously and putting it all on paper it will be more hassle,maybe it's just me but I've chatted to a few windys over the past few weeks and they have all got employees who are all unreliable. Trouble is all there work now requires at least 2 to keep up with the work even on the pole.

Thats exactly how it is for me. I offloaded a nice wedge of work yesterday. I wonder if thats the pay-off when you employ, you end up getting a fat pocket of cash at the end of it all but not a lot whilst you're employing.

[Rich Wilts]

I would expect any employee to turn over a min of 50 k per year even with holidays.

Rocking horse $hite mate.

[Smudger]

I would expect any employee to turn over a min of 50 k per year even with holidays.

Rocking horse $hite mate.

Disagree
Darran

[Smurf]

I would expect any employee to turn over a min of 50 k per year even with holidays.

Rocking horse $hite mate.

Disagree
Darran

Popcorn anyone ?

[Rich Wilts]

No need for popcorn. I respect Darran and his opinions.

My angle is if someone is able to earn you £1,100/£1,200 a week then they're not likely to be the sort working on the cards. I don't dispute there are people out there that can earn you that amount of income but they are rare and you would have to pay them a damn good wedge. And they would deserve every penny.

Most sole-traders who work for themselves don't earn that much - how is it that someone else would do that and more for you?

[Smudger]

Smurf does like to try and wind it up

My situation may be a little different as we now do a lot of pressure washing and gutter clearing which are different price structure to just the windows.

It's tricky to give an answer on this forum, mainly because the post would be very long, most likely boring and people picking one line out of context esp, if the text is not exactly how you thought it should read.

I don't think because someone can turnover £250 a day they are going to leave, and set up on their own, it's more complex than that, we all undervalue what we have done in building up a business - not everyone can do this, and how many people are in a position of being able to afford little to no income for a few months while finding customers and investing in a van and equipment ??

Darran

[8weekly]

I disagree Matt. My worker turns over more than me in a day. I've got my second one lined up. Both will get paid slightly less than 1/3 of what they turn over.

[Smudger]

Which is IMO about the correct ratio

Darran

[NWH]

I disagree Matt. My worker turns over more than me in a day. I've got my second one lined up. Both will get paid slightly less than 1/3 of what they turn over.

Good luck to you 8 weekly you seem to be very fortunate in getting good employees that work well for you and are able to be motivated enough to get there arse out of bed and work for a living,I don't think it has much to do with you personally I think a lot of it is luck IMO. I could give a bloke 25 jobs a week and he could go and earn a thousand pound but I honestly haven't found anyone I trust enough to do it for me.