[Mr BSF]

Their are a few ways you can do it, one is cash accounting scheme only if your turnover is less than 660k pa, you fill in a vat return every 3 months you minus what you have paid against what you have collected, this sum is then paid.

heres a link with loads of info:

http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageVAT_ShowContent&propertyType=document&resetCT=true&id=HMCE_CL_001208

regards

BSF

[cavanagh_matthew@y]

thanks for your help

[gerrystyles]

Some of the contracts I have tendered for will not look at you unless you are VAT registered

[drivewasher]

ok thanks for the repsonce.
so if you already have customers but dnt charge VAT on ur invoices now but them register for VAT will u have to tell them or just bill the with the VAT?

If you don't charge VAT now then your'e NOT VAT registered, when you become VAT registered you will be given a VAT regisration Number this then should be printed on you're invoce and VAT ADDED ON to the charge you make the client then claims the VAT back you charged him, so if client is VAT registered it makes no difference to him

IE you want £100 for a days labour, you bill client for £100 then add the VAT on to bottom of bill 17% = £17.50 total invoice £117.50 the client claims VAT element back if he's vat registered useing his reg number. You keep your £100 and pay the VAT element of your bill to CUSTOMS AND EXISE DEPT under your VAT number when you VAT returns are due.

The £100 that's yours you pay tax on at the end of the year when you submitt your books the two are really seperate as I said before when you are vAT registered you are simply an unpaid tax collector. As you are making a proffit you genrally pay more than you get back!

Not being VAT registered can make you uncompettitive when large amounts of materials is used, If say I was a Carpet fitter and the local hotel wanted all new carpets  as I'm not VAT registered i can't charge VAT, but I pay VAT on the carpet from the wharehouse so, £1000 carpet bought VAT added on at warehouse £170 so I paid £1170 for carpet. When I bill the VAT registered hotel for carpet at £1170 (what I paid cos I'm not loosing out but cant show it as vat) they can't get the VAT element (£170) back from exise dept, so you se it can make you 17.5% over priced on materials aspect of a job.

[Tim Downer]

Drivewasher.....Surely those that are VAT registered would sell their carpets for £1,170 also.....because thats what they would have paid for it? Ok, they are going to be able to claim the VAT back......but you would have your VAT charge ontop of the £1,170 = £1,418......now you are more overpriced then the smaller company.

Am i wrong on that? (seeing as i am not VAT, but thats how i would see it)

Regards

Tim

[drivewasher]

Tim,
I know I'm rambling now but my point is if your NOT vat registered you are 17.5% dearer on materials, because you have paid vat and pass it on as included in the price of goods (you can't list it as vat) you still have to get your cost of the good back off the client, even make a bit on it so you build the vat youv'e paid in the price otherwise you would sell thm £1170 of goods for £1000, don't forget the goods only cost £1000.
That's why companys don't quote price with vat as when dealing with other vat reg companys it doesn't matter as each company claims it back.

[Mr BSF]

Drivewasher.....Surely those that are VAT registered would sell their carpets for £1,170 also.....because thats what they would have paid for it? Ok, they are going to be able to claim the VAT back......but you would have your VAT charge ontop of the £1,170 = £1,418......now you are more overpriced then the smaller company.

Am i wrong on that? (seeing as i am not VAT, but thats how i would see it)

Regards

Tim

Here we go again, the old vat issue has reared its head again….

For starters £1000 plus 17.5% is £1175, not £1170, vat on £1170 is £204.75 = £1374.75……. not £1418.00??? a 20k contract plus vat is 23.5k not £24,242.42??? Tim.

If the example for the carpet was bought by a vat registered company at £1000 plus vat £1175.00, its cost him a grand (he claims back £175) if it was bought by a non registered company its cost £1175.00, so the vat registered company can sell it cheaper than the non registered company.

Getting back to the main post, its much better to register for vat from the start of your venture, as you can claim it back for all equipment and supplies, it also looks better to your commercial customers (as in your not a tiny company) domestic customers no, because you have to allow in your labour charge the 17.5% vat, which isn’t good because they aren’t vat registered and means they cant claim it back.

Regards


BSF  

[Tim Downer]

Mmmmmmm......looks like i will need a new calculator.

At least i can claim the money back from the Tax man when i get it.

Tim

    

[drivewasher]

Sorry!!! it was me who suggested £170 was 17.5% of £1000, I always rond figures in my head off. But as you see it did demonstrate the point.