'New-Build' VAT exemptions apply.
£61,000 is the current mandatory registration limit, as of April 06.
We have just had to register as our gross exceeded £61,000 during the previous 12 month trading period up to December 06. (Awaiting confirmation)
Most of our work comes under 'New-Build' so we cannot charge developers VAT! However, we must inform them of our VAT status. Any other work we do, ie: Domestic cleaning, Communal area cleaning etc. we will have to charge VAT in future.
We opted against the 'flat - rate' because 90% of our income is VAT exempt. The main problem with flat rate is that you are always paying the VAT man at the amount they estimate for you - and you can never claim anything back in any one year - even if, say, you lost a major contract and your income dropped!
We beleive we will benefit from VAT registration in the long run. We won't be charging much VAT and so won't have to pay much back. Also, don't forget, everything we pay for relating to the business - we are charged VAT - so now we can claim all of this back every 3 months.
Downside - unless you have the time and the ability to fill out all the forms etc. that VAT registration entails every 3 months - you will have to pay an accountant!
This year he will cost me £800. For this he will file our annual business partnership return, the 2 partners individual returns and soon, our VAT returns 4 times a year.
Judge for yourself if this is value for money!
