[Kev R]

This year I just missed the VAT registration point but next year I think maybe not.

What do you do when you hit the VAT point as regards to invoices etc. Could you add VAT to your current prices or would you recalculate your invoices to the same amount with the VAT added?

Any advice appreciated 

[gordonswindows]

Hi Kev

You need to add the vat 17.5% to your price, remember its the taxmans vat you only collect it for him.

Please dont reduce your price then add the vat to reach your previous price because that means you are paying the vat when it should be the client who pays it.

All clients know they have to pay vat just like on any other luxury item or service, its not you charging it, it is the government and the client knows this.

regards
Gordon

[Kev R]

What about my existing clients that I have not been charging vat due to not being VAT registered?

 I understand I will have to add it to new clients quotes and invoices but its my previous clients Im confused about?

[Rob_Mac]

Example

last years income

Month1   £20000.00
Month2   £20000.00
Month3   £10000.00
Month4   £5000.00
Month5   £1000.00
Month6   £1000.00
Month7   £1000.00
Month8   £1000.00
Month9   £1000.00
Month10 £1000.00
Month11 £1000.00
Month12 £1000.00

In this example you have earned £63000.00 last year.

In the new tax year - the first month you earn £22000.00 you are over the VAT threshold. On a rolling year you have earned £65000.00 - VAT is worked out on a rolling year

You take month1 off - £20.000 and add the £22000.00 on giving you the £65000.00.

Does this make sense - it does to me.

Always add VAT to your prices

Rob

[Rob_Mac]

You say to existing customers that you have reached the VAT threshold and you will be adding VAT to any future invoices.

You need to register for a VAT number

Rob

[elite mike]

hi kev
i say keep below the theshold you will save yourself a shed load of problems

i think most on this forum would agree

mike

[Moderator David@stives]

Kev

I just aded vat to everyone.

For all my commercial there was no problem, they accept it readily

For my domestics i put most up but let a few slide maybe 50 or so, especially the ones i knew were close to the bone, but to compensate i put some up by 25 - 30% which more than payed for the ones i didnt put up.

ps. dont listen to Mike , I have neve heard such bad advice

[elite mike]

hi dave
sorry you feel that way

just my experiance,after a few inspections over the years

ime sure others will tell you the same  
regards
mike

[Moderator David@stives]

Mike

By staying under vat level purposely, you are telling your self "Right this is it, This is the end of my ambition"

you will never find out how far you can go in this game, never giving your chance to make a million.

So many businesses fail or are stifled by doing the same.

[elite mike]

yeh i know where your coming from but

there is more to life than be coming a tax collector for gb

i hope you can see this

and  also dave i would love to live where you live

regards
mike

[AJ]

can't see the problem with vat.
It does have its benefits e.g not vat reg - buy a pole 200 + vat, you pay 235. vat reg - buy pole for 200 + vat, you pay 235 and claim 35 back against your vat bill.
Everything you buy has vat on it, fuel, equipment, vans, if you're reg'd, you effectively pay 17.5% less than you are now.
Also, some companies will only use vat reg'd firms.
All you have to remember is that vat you have collected is not your money, SO DO NOT SPEND IT.

[Helen]

hi kev
i say keep below the theshold you will save yourself a shed load of problems

i think most on this forum would agree

mike

And what if he can't keep below the threshold...what then try and dodge customs and excise....I think not.


If you have reached that point , register "flat scheme" and add 17.5% to existing clients prices whether commercial or domestic.
As Dave said, be sensible, already high priced domestic's perhaps split the vat cost 50/50 with them or people that you really don't want to lose. The majority of our existing custies when we registered were so pleased for us that it was going that well and didn't mind. We guaranteed though that we would not even think of price increases for 2 years after doing so. Newbie custies easy just give them the full price. This is a luxury service afterall and that was what VAT was meant for

[elite mike]

sorry everyone
had a few glasses of red last night 

was feeling hacked off with the returns

what i should of said is have a word with your accountant.

i registered in 1982 ,when it was 8%,
regard mike

[telboy]

Supposing you fall significantly below the thresh-hold what happens then

[elite mike]

you can carry on, and hope things pick up,

or you can de register

regards
mike

[robbie14000]

Kev- just gone vat and had the same problems with domestic customers.
If you apply for the flat rate scheme you get a 15 discount in first year so you only have to pay 10% vat for the first year then 11% there after. so youy make an extra 6.5% BUT you cannot claim any vat back.
Hope this helps but speak to your accountant.
Thanks Robbie

[AuRavelling79]

Doesn't effect your commercial custy's cuz they can claim vat back.

[eddie d]

robbie its 10% less 1 for the first year .

[Rob_Mac]

I noted today that on the HRMC website the VAT threshold has gone up to £67000.00

Rob

[Kev R]

Thanks for all the advice. I wont be able to avoid it for much longer as I am about to sign a large contract that is over the threshold by its self. I have no interest in staying below the threshold as I want to leave a viable business for my kids and purposefully stifling business makes no sense to me at all.

Im not to worried about domestic customers as they are all very well priced and I planned just to allow for this.

You have all answered my questions about my commercial clients and now I can sleep a little easier with that off my mind

Thanks again

Kev