vat registered

[Chris Milne]

Just wondering how many of you one man bands are vat registered? One of my work sources recommended it to me today( he has no personal gain before you ask) but my brother in law account has never mentioned it! Just started on my own so a little naive about it all!
Cheers

 

[pete555]

by all meaans register if you want to but if your not going to exceed the threshold why bother you only become a tax collector for the goverment

 

[tazz]

You have to work this out with your accountant, if your going to just do private homes then its not worth it, if you work for contractors or import export then its worth claiming it back

 

[Rappid]

I was told, once you are VAT registered, you cannot un-register. Will also cost you more for doing VAT returns and all the paperwork that goes with being VAT registered.

 

[higgi17]

You can de register for vat at the end of a vat period providing your paid up. Also you need to know you are or will be under the threshold.

 

[VoltzElectrical]

If your turn over is under £150 000 you can use the flat rate scheme which is really easy and quick. Basically you charge the going vAT rate but pay the IR 14%. You keep the difference. Takes minutes online to do the return every 3 months.

 

[glasgospark]

one man band - accountant will charge more as doing vat returns quarterly
+20% on all jobs and if domestic a bit of a pain as im asked that every time ( is that +vat)
you may be forced into it if you turn over more than 77k
you can also do it voluntary could benifit in some situations but more hassle than its worth
although you can claim all start up costs back so 20%back on van,testers,tools,plant,workwear etc etc

so buying a van at 10k you claim back 2k
megger 1000 you claim back 200...........and so on

i wouldnt recommend going vat registered until they tell you now you have to

 

[MDJ]

Depends on your work TBH, if you are competing with other electricians on commercial works, Just for an example, then most builders and customers at that level won't give you work if your not VAT registered, you may be able to carry out some works of course with some customers but you will find it tough, However if your works are for example domestic for private customers and you do not go over the threshold then don't worry about it, on a final note, once you get used to paying and recieving VAT it comes second nature and you don't find it so hard after initial thoughts about it, JMO.

 

[Octopus]

Just wondering how many of you one man bands are vat registered? One of my work sources recommended it to me today( he has no personal gain before you ask) but my brother in law account has never mentioned it! Just started on my own so a little naive about it all!
Cheers

Do you turn over more than £73K, would you like your prices to rise by 20%, your accountants fees to quadruple? If these awnswers are all yes then you need to register for VAT, but that's your decision.

 

[imago]

My advice would be to register when you need to due to turn over, unless you work for clients who require you to be VAT registered. If/when you need to register then make the most of it.

Don't worry too much about the doom sayers regarding VAT registration, it can work in your favour. I became VAT registered last year and all is well. Accountant fees only increase if you can't be bothered doing the return yourself. It really is very simple, even more so if you use accounting software as it's done for you.

Your prices don't need to increase by 20% as you can offset a fair bit by working out what you claim back from a job and then deducting that from the net amount. That said I just drop the VAT onto the total and it hasn't harmed by order book at all.

Being VAT registered can have financial benefits as mentioned above, but there are others too. If you're avoiding the race to the bottom by presenting a professional image to justify the higher prices than some of the 'competition' then VAT registration adds to the image of the company in the same way as trade memberships or a sign written van do.

 

[Dale200bhp]

I set up in business in 2004 and I had to go vat registered within six months as I hit the threshold. Your better of as everything you buy you get the Vat back like fuel tools and the van.
I may loose a few domestic jobs because of it, but you never going to win every job any way, and if you work for companies and clients who are vat registered they get it back.

If you price up say at £20k job for a vat registered client and the materials are £10k plus vat which makes it £22k total if your not registered, and if you are registered it would be £20k plus vat
Your £2k cheaper!

My accountant charges £100 for vat return also

If my work was solely private domestic it would be a tough choice though.

 

[plugsandsparks]

Been Vat reg from day one. Helped alot for set up costs, at least a grand saved. I am ltd as well so paper work is all done using quickbooks, VAT is simply a one button report. Once all my receipts are in quickbooks and i have checked payments in the bank and updated monies is, it takes less than an hour / quarter to run the report, checked it go online and complete the VAT return.
I use the cash basis for paying VAT and it helps with cash flow as you only pay VAT on income you have actually received in the bank.
Vast majority of my work is commercial/industrial anyway so i am as competitive as i need to be. Some components i have to supply cost 1000s so not being VAT registered would be a serious loss of competitiveness and or margin for me as the VAT is un-recoverable otherwise.

 

[Essexboy7]

If your turn over is under £150 000 you can use the flat rate scheme which is really easy and quick. Basically you charge the going vAT rate but pay the IR 14%. You keep the difference. Takes minutes online to do the return every 3 months.

Please correct me if i am wrong but the 6% difference,doesnt that get added onto your end of year profit and you pay tax on it?

 

[des1957]

You have no choice in the matter. If you turn over more than the vat threshold, you have to register. I think it's about £70k. Just means you have to be more transparant in your dealings as you can get a vat investigation at any time and records have to be kept for 7 years.

 

[Octopus]

VAT for FY2013 is £77K, not sure about FY2014