[ftp]

Oh, they would love that - or find a cheaper non vat cleaner.

[ally gray]

dont forget you can also reclaim vat paid on new vehicles.

[simon123]

David you can apply for VAT registration any time before the threshold, that goes without saying, course you don’t claim and you don’t charge VAT if your not registered.

But the original post is talking about being VAT registered and VAT is a tax for the man in the street only, it is not in any way a tax on business.

You can either interpret it the correct way or the wrong way it’s your choice.

 

Ewan,

You seem to be struggling with the implications to your business of going VAT registered if dont need to.

Let me try and break it down for you -

If you register for VAT all your customers will have to be charged VAT...thats both your residential and commercial customers.

So, now we've established this - lets look at the next step

What can your business reclaim now you're VAT registered?

Window cleaning is 'labour intensive' and has few overheads. So you've got some fuel, some scrim, new rubbers or poles, the odd brush.

So your 'reclaimable VAT' each quarter is going to be very low. But your 'VATable income' is going to be relatively high.

You now have two choices -

1. Absorb the VAT into your current prices (effectively reducing your price by 17.5%)

2. Put your prices up across the board by 17.5% to cover the new tax you have voluntarily agreed to pay HMRC.

If you dont have to go VAT (because your turnover is below the threshold) and your business cannot reclaim more than it pays, there is no advantage doing it.

It will end up costing YOUR BUSINESS money. and thats leaving aside the extra burden of producing a VAT return each quarter!

David I understand where you are coming from when you say it will cost your business money, but that is not how to do it and if you are still thinking this way, “it will cost my business money” you don’t know what you are doing.

There's a lot more to consider before you decide to go VAT registered, before you reach the threshold.

Fact is you have to register for it when you reach £67K in sales. Which is less than £280 a day average.

So at that point there is no choice, it would be in your interest to have figured this out before you reach that point.

Ewan talk to your accountant mate , he might just make you rich 

[ftp]

Can you claim vat back on snacks?

[gordonswindows]

The original question was if registering for vat made any difference to your business

Yes yes and yes

Yes you get more work

Yes you get better work

Yes you make more money

As usual the people with a little knowledge are the scare-mongers

If you register for vat via the flat rate scheme you charge the expected 17.5% and you get to keep up to 10% in the first year. The clients commercial and domestic readily accept the tax as we all already pay it on most things we buy. The client doesn't realise that in real terms what has actually happened is you have raised your prices by up to 10%, it is like being paid to collect the tax.

The sooner the so called business people embrace the opportunities of taxes and vat rather than wasting time and energy trying to "avoid" it the better for us all.

We pay a great deal of tax in all their many forms and no I don't like it but if every business person declared and paid their share of taxes the rest of us wouldn't have to pay so much. Why should I pay their taxes?

It is the same as the retailers who add on a few percent of their costs to the price of their goods to  cover the losses they suffer through theft. You pay more so they can pay nothing.

Vat can be a benefit to your business but only if you understand it and take advice from either your accountant or the local tax office.

Stop being afraid and investigate yourselves, start at the tax website and good luck

Gordon

[simon123]

The original question was if registering for vat made any difference to your business

Yes yes and yes

Yes you get more work

Yes you get better work

Yes you make more money

As usual the people with a little knowledge are the scare-mongers

If you register for vat via the flat rate scheme you charge the expected 17.5% and you get to keep up to 10% in the first year. The clients commercial and domestic readily accept the tax as we all already pay it on most things we buy. The client doesn't realise that in real terms what has actually happened is you have raised your prices by up to 10%, it is like being paid to collect the tax.

The sooner the so called business people embrace the opportunities of taxes and vat rather than wasting time and energy trying to "avoid" it the better for us all.

We pay a great deal of tax in all their many forms and no I don't like it but if every business person declared and paid their share of taxes the rest of us wouldn't have to pay so much. Why should I pay their taxes?

It is the same as the retailers who add on a few percent of their costs to the price of their goods to  cover the losses they suffer through theft. You pay more so they can pay nothing.

Vat can be a benefit to your business but only if you understand it and take advice from either your accountant or the local tax office.

Stop being afraid and investigate yourselves, start at the tax website and good luck

Gordon

Gorden I havnt even met you and I like you LOL !

[davids3511]

The original question was if registering for vat made any difference to your business

Yes yes and yes

Yes you get more work

Yes you get better work

Yes you make more money

As usual the people with a little knowledge are the scare-mongers

If you register for vat via the flat rate scheme you charge the expected 17.5% and you get to keep up to 10% in the first year. The clients commercial and domestic readily accept the tax as we all already pay it on most things we buy. The client doesn't realise that in real terms what has actually happened is you have raised your prices by up to 10%, it is like being paid to collect the tax.

The sooner the so called business people embrace the opportunities of taxes and vat rather than wasting time and energy trying to "avoid" it the better for us all.

We pay a great deal of tax in all their many forms and no I don't like it but if every business person declared and paid their share of taxes the rest of us wouldn't have to pay so much. Why should I pay their taxes?

It is the same as the retailers who add on a few percent of their costs to the price of their goods to  cover the losses they suffer through theft. You pay more so they can pay nothing.

Vat can be a benefit to your business but only if you understand it and take advice from either your accountant or the local tax office.

Stop being afraid and investigate yourselves, start at the tax website and good luck

Gordon

Hi Gordon
I can only see this being of any value on commercial. People do expect to pay tax, but not necessarily on their window cleaning. With the current climate of uncertainty, I am not sure now is the time to be hitting them with almost a 20% increase.

I don't believe I am one of the prople 'with little knowledge', I have two other companies, both VAT registered. I just cannot see the point of handing over a lump of my income unless I have to.

Can you explain why you get more and better work simply because you are VAT registered. In fact, I see it as potential missmanagment. If you invested that vat that you do not need to pay into advertising, equipment, training etc. you would probably get more and better quality work.

[seandyer2003]

i was thinking that, if you feel you can hit your customers for a huge inc+ like that, why not do it and then keep the money, forget giving it to HMRC!! wait till you hit the band, if ever, as a sole trader, but you will have more chance by putting prices up!

[simon123]

Davids , I think you have to agree to dissagree mate 

[gordonswindows]

Hi David

Not sure if i 'm understanding your point because if you do not charge vat you do not have any extra income to invest in advertising etc

If you do charge vat on the standard plan at 17.5% you do not get to "keep" any of this money, all you are doing is being an unpaid tax collector, so again you still do not have any "extra" money to reinvest

If you can join the flat rate scheme you collect 17.5% but only pass on around (amounts vary according to circumstances) 7.5% which leaves you the 10% as an extra profit which yes you can spend on promoting your business.

So by registering for vat it generates up to 10% of your turnover for you to do as you see fit= this is definately a benefit

Being vat registered allowed us to tender for larger jobs for local council and even government contracts Rightly or wrongly it gives confidence to the contractor that you have the experience the resources and the staying power that they need to depend upon.

It also demonstrates your willingness to obey the law to do the right thing this demonstrates your commitment to rules and procedures ie more likely to follow H&E guidlelines more likely to have sufficient insurance fully employed staff etc etc.

While its not my opinion the accepted train of thought is that if you have been around long enough and have been able to generate such volume of business that you needed to register for vat you must have a sound knowledge of both your trade and of how to run a business. It is a yard stick for clients to gauge you by, similar to your employer/public liability which is scaled by how many employees you have. This allows your client to gain "real" knowledge of your business.

Anyone can and many do have very slick websites yet how can a client decide if this website has been "talked up"? can you see how this could lead to problems if the cleaner hasn't got the manpower or equipment or more importantly the cashflow that the website may suggest he has.

Vat gives some form of guide not a science but a guide and if it comes down to similar quotes from two tenders the vat registered one nearly always wins.

Gordon

[ronnie paton]

Gordon i agree with what your saying but please advise me, my situation is im getting v close to vat threshold i have about 70/ 30 split in favour of commercial, most of my commercial is appartments(which dont pay vat has there a none profit org) how do i pass on the vat without out losing custom? and also i dont think in the current climate residential customers will swallow i 17.5% increase.

Your advuce is appreciated.

[davids3511]

Davids , I think you have to agree to dissagree mate 

Why, I am just asking for his opinion? Maybe he is right and can show me the light. Personally, having two other companies VAT registered, even the though makes me cringe.

[simon123]

Gorden you make some excellent points !  Give me a ring sometime when you are quiet mate ?   Or email me , thanks buddy 

[Rob_Mac]

Ronnie

We do some work for a non profit making organisation and they have to pay us the VAT

Rob

[ronnie paton]

rob

what i mean is there not vat reg so obviuosly my prices will have to go up 17.5% which could make them go else were.

[P®oPole™]

VAT for a £1300 pm income (that you sold anyway)

Business accounts are so "cool" because you get an account manager

You puzzle me Simon

Pro

[simon123]

VAT for a £1300 pm income (that you sold anyway)

Business accounts are so "cool" because you get an account manager

You puzzle me Simon

Pro

Sometimes i puzzle myself mate !  If i could lend you my head for a week you would be more understanding 

[windowwashers]

Hi David

Not sure if i 'm understanding your point because if you do not charge vat you do not have any extra income to invest in advertising etc

If you do charge vat on the standard plan at 17.5% you do not get to "keep" any of this money, all you are doing is being an unpaid tax collector, so again you still do not have any "extra" money to reinvest

If you can join the flat rate scheme you collect 17.5% but only pass on around (amounts vary according to circumstances) 7.5% which leaves you the 10% as an extra profit which yes you can spend on promoting your business.

So by registering for vat it generates up to 10% of your turnover for you to do as you see fit= this is definately a benefit

Being vat registered allowed us to tender for larger jobs for local council and even government contracts Rightly or wrongly it gives confidence to the contractor that you have the experience the resources and the staying power that they need to depend upon.

It also demonstrates your willingness to obey the law to do the right thing this demonstrates your commitment to rules and procedures ie more likely to follow H&E guidlelines more likely to have sufficient insurance fully employed staff etc etc.

While its not my opinion the accepted train of thought is that if you have been around long enough and have been able to generate such volume of business that you needed to register for vat you must have a sound knowledge of both your trade and of how to run a business. It is a yard stick for clients to gauge you by, similar to your employer/public liability which is scaled by how many employees you have. This allows your client to gain "real" knowledge of your business.

Anyone can and many do have very slick websites yet how can a client decide if this website has been "talked up"? can you see how this could lead to problems if the cleaner hasn't got the manpower or equipment or more importantly the cashflow that the website may suggest he has.

Vat gives some form of guide not a science but a guide and if it comes down to similar quotes from two tenders the vat registered one nearly always wins.

Gordon

I can see your points and some are valid IMO, but someone can start a business today get all insurances and go VAT registered straight away with no turnover at all so this does discredit some of the points somewhat (even though to a degree I think you are right just not on all commercial.
A slick website is just the same as VAT no body knows what you can do from it. yet the website IMO helps a great deal (I know I am going to say that as I design them, but I strongly think it is true).
I know at some point I will have no choice but to register for VAT in one of the business' and be an unpaid tax collector like others but for now I am happy as I do not go after very large jobs in the Thousands as it is not in my business model, this could change in time who knows.
I got a office contract about 4 weeks ago and the reason was the way I handled myself on the phone and in person, vat had no bearing on this what so ever VAT does not make you clean windows any better or mean you will turn up etc. Please do not think that I am saying your totally wrong as I am not, I am just making a few fair points from the other side of the coin so to speak.

Ian

[simon123]

Good points Ian 

[Paul Coleman]

VAT for a £1300 pm income (that you sold anyway)

Business accounts are so "cool" because you get an account manager

You puzzle me Simon

Pro

Sometimes i puzzle myself mate !  If i could lend you my head for a week you would be more understanding 

Is it to do with bi-polar?
I've known several people with this and it often seems to produce situations where somebody has a view of their capabilities that are very incompatible with reality.  We can all go through phases like that I suppose but with bi-polar it does appear far more extreme (hence the revised name for the condition).
I won't go into how the condition affected the others I knew as that's their stuff.  Some of the things you post on here seem to have some resemblance.
I realise I'm probably not exactly your favourite person but I do have some empathy with you.