Vat deregistration
Discussion
Hi guys
Bit of background, was a sole trader for 5 years selling car parts went well never went over the vat threshold.
Due to a change in circumstances my hand was forced a few years back to do something different so decided to sell cars instead which is what i am currently doing.
Not huge numbers but I registered for vat :-( and went ltd
Selling cars for a year and a half now rolling 12 month period turnover 140k YTD turnover 70odd k so approaching the limit for this year already.
Due to the vat margin scheme there is no incoming vat and i have collected outgoing vat at a rate of about 16% meaning i have not done badly but made very little for myself.
I now want to stop selling cars completely and go back to selling parts which will mean my annual turnover will be below the limit in the future...
But what happens now? Will hmrc laugh if i try to deregister now or will i have to wait for my turnover to naturally drop over say a 6 month period to below the limit meaning i will be collecting 20% vat for the govnment on each sale making things a bit tough (theres no incoming vat on the parts i sell)
Any advice much appreciated, want to stay ltd.
Regards
Mat
Bit of background, was a sole trader for 5 years selling car parts went well never went over the vat threshold.
Due to a change in circumstances my hand was forced a few years back to do something different so decided to sell cars instead which is what i am currently doing.
Not huge numbers but I registered for vat :-( and went ltd
Selling cars for a year and a half now rolling 12 month period turnover 140k YTD turnover 70odd k so approaching the limit for this year already.
Due to the vat margin scheme there is no incoming vat and i have collected outgoing vat at a rate of about 16% meaning i have not done badly but made very little for myself.
I now want to stop selling cars completely and go back to selling parts which will mean my annual turnover will be below the limit in the future...
But what happens now? Will hmrc laugh if i try to deregister now or will i have to wait for my turnover to naturally drop over say a 6 month period to below the limit meaning i will be collecting 20% vat for the govnment on each sale making things a bit tough (theres no incoming vat on the parts i sell)
Any advice much appreciated, want to stay ltd.
Regards
Mat
227bhp said:
Deregistering threshold is 83k. You do realise putting 'Deregistering for VAT' into Google would have been much quicker than typing that lot out and given you all the facts (not thoughts) in a second?
Yes and in a similar vein you could have googled how to be an arse and it would have saved you 6000 posts.Not everything is on google, and i am well aware of the deregistration limit. This is a complete change of direction/business and was after experience of people that have been in a similar situation on the best course of action to save me money.
227bhp said:
Deregistering threshold is 83k. You do realise putting 'Deregistering for VAT' into Google would have been much quicker than typing that lot out and given you all the facts (not thoughts) in a second?
Yes and in a similar vein you could have googled how to be an arse and it would have saved you 6000 posts.Not everything is on google, and i am well aware of the deregistration limit. This is a complete change of direction/business and was after experience of people that have been in a similar situation on the best course of action to save me money.
Yes it is i can access the online form but will they will actually let me,
Its essentially the end of one business and the start of a new one so it seems unfair to get the hangover from the old one choking the growth of the new one.
What im getting at is can I structure it all differently to get out of vat in the short term for example setting up a new company or going back to being a sole trader?
My accountant briefly said to monitor turnover for 6 months but accountants are not always infallible IME hence on here asking.
Its essentially the end of one business and the start of a new one so it seems unfair to get the hangover from the old one choking the growth of the new one.
What im getting at is can I structure it all differently to get out of vat in the short term for example setting up a new company or going back to being a sole trader?
My accountant briefly said to monitor turnover for 6 months but accountants are not always infallible IME hence on here asking.
What operating mechanism are you going to use in you new venture? If it's the same limited company then no, you probably can't just deregister & will have to account for VAT (even if it's zero). If you're going to close that company & start trading as a Sole Trader then the new operation doesn't have to be VAT registered (unless you hit the limit, or or likely to, of course). What you can't do is use any of the facilities (bank account etc) of the limited company.
Gassing Station | Business | Top of Page | What's New | My Stuff