VAT Conundrum...

[nick_j007]

Hi guys. I need to broaden my thinking as I seem to have hit a ceiling on my earnings as a dog behaviourist to the point that I will need to go VAT registered if I earn any more.

The problem with this is that most of my clients are private individuals and a 20% increase could come as a blow to my new client numbers and I'd have to work quite a bit harder to make that up, though price is a funny thing in this industry as people will pay what they perceive to be good value to get a problem sorted.

My accountant is telling me to earn less which on a business level is completely against my nature, as I've worked my butt off over 10 years to get to this point, so it's a nice problem in some respects, but to stop pushing for fresh work and to come off the accelerator is just not me.

Having said that I also seem to be at a point where I'm working flat out and unable to take on much more work, workload wise. I'm fully booked until September.

I also work as a dog expert witness whereby VAT would be chargeable on the invoice and I may well shift over to more of this work in time and to consider doing less behaviour work, but that would be a long term switch over.

I respect my accountant and whilst having a keen business mind, let others do the accounting.

So, any thoughts? I can't be alone in this situation. I have always set the sky as the limit and my accountant is setting the VAT threshold (81k IIRC) as my limit!

Thanks.

Nick

[nick_j007]

mikef said:

I'm guessing that you have relatively few VATable supplies in that line of work? May be wrong on that.

If so and you go on the flat rate scheme (goodness knows what the categorisation is for pooch botherers) you will save around 7% on your VAT returns and may not be obliged to pass the full 20% on.

If you have a good reputation, accept that you may lose some valued clients when you explain that you need to introduce but you will quickly build up more.

Thank you for that. As you rightly state, very few VAT able expenses apart from a few supplies here and there. My car/fuel is the biggest overhead.

When presenting prices (if I were VAT registered) am I obliged to say I am VAT registered and the cost includes VAT? I think I will need to offer an invoice anyway so that will set it all out.

The business is still growing with a good reputation and a very stable base, although I tend to work on new clients rather than a lot of repeat business (correct the issue and move on, and repeat).

I'm inclined to think s*d it, go VAT registered and step it up again from there, but then I am already at full capacity on a workload level. Hmmmm.

[nick_j007]

Eric Mc said:

Shows the iniquitous effect of thresholds. People doing their best to STOP their businesses from growing.

Exactly. Oh the irony! It hurts I have to admit.

[nick_j007]

mikef said:

Nick - yes, you need to provide VAT invoices (you may be surprised how many people are running guard dogs on their company and claim against tax, even when the dogs are not not exactly Alsatians)

Guard dogs...I see, thanks !

[nick_j007]

So it would seem that I really am a bit stuck at this limit and it's as real as the accountant is saying. I need to get my head around it.

Thanks all.

Nick

[nick_j007]

Simpo Two said:

Well if the threshold is around £75K and it's all fees, that's not a bad income. Simply cap it at that and take the extra time off as holiday so you can spend some

It's a mindset thing for me. But I agree with you

[nick_j007]

mikef said:

I was going to say that. £80K is great going for any individual professional. Dog Expert Witness: "yes m'lud that definitely looks like a dog, where do I send the invoice?"

Oh, have you been in court watching me? Uncannily close to the truth!

I assess 'dangerous dogs' for the courts, dogs that have bitten usually. Most recently two dogs that had bitten two police officers. Interesting work.

Good night all and thank you for the input.

Nick