VAT or Not VAT Registered? Commercial or Domestic more profitable?

[dixon9]

VAT:

I understand that if your invoicing falls below 65K per year you don´t need to be VAT registered.

Advantage is that it is easier to make your quotes more competitive in domestic and certain commercial situations - Disadvantage is that perhaps some customers (Commercial, Industrial or local authorities?) may need your company to be VAT registered to carry out work? No VAT registeration and you lose work?

How many sole traders/small Ltd companies on here are VAT regsitered? Is it worth it?


Commercial or Domestic:

Commercial work does have the advantage of no Part P registration fees I suppose.

Which customers are easier to deal with? Which is more profitable in general?


Any feedback greatly appreciated.

 

[Graeme Harrold]

VAT Registration does have a compulsory start limit, however if you are below this you can register voulentarly, which Im considering this year. Basically all you are is an unpaid tax collector.

Two schemes operate.

You pay VAT on purchases at 17.5%, then invoice your customer at 17.5%.

e.g. you buy something at £10 VAT = £1.75
You then sell at £20 VAT = £3.50
You pay the Tax man the difference.

​

On the flat rate scheme there are different values for different industry sectors and 8% is currently for sparks (plus a 1st year discount of 1%). This is calculated on your annual turnover so keep track of it over the year!!!!

Accountant definately, but a good one should save you more than you pay.....shop around!!!

 

[kung]

If i get near the VAT limit im off on holiday on a business trip to look for new customers and buy tools etc etc no way do i do anymore for the taxman than i need and as said esp in recession times we have enough trouble getting work as people want the cheapest price done so if i add 17.5% vat ontop of my price then i may as well go back on books as paye ! might be diff in commercial/ind as they dont mind what they pay for a tax dodge just like company meals etc but in domestic in this day and age most of the time the pub bloke wins most jobs as when they employ us they pay extra thats all they know not what it costs us to get where we are in fee's so for me i wont go vat reg i dont believe its worth it as i mainly do domestics as long as im reg with a scheme opp and all legit and sign the job off their happy.