VAT registration query
Discussion
227bhp said:
Probably not. Ask yourself if you will get any more business by being registered? Some companies (who are) don't like dealing with those who aren't as they can't claim it back.
It's generally to be avoided because of the extra paperwork/accountants fees that you will incur too.
All my work initially will be through a third party so it's not as if I'm actually in direct contact with the companies. It's generally to be avoided because of the extra paperwork/accountants fees that you will incur too.
If the aspect is whether or not I'll get more business then I think I'll leave it.
PurpleMoonlight said:
If the majority of people/businesses you are billing are themselves VAT registered then yes, if they are not then no.
This would be the first question I'd answer.If yes, then do you have much in the way of VAT'able expenses to claim back. If yes, then go with standard scheme, if no then go with flat rate.
my main supplier of contracts is VAT registered, so I guess it would make sense
i'll have to have a sit down with my accountant and see how the lay of the land lies.
my other main expense with VAT is fuel -
so I charge my supplier VAT and claim back VAT on the fuel?
or is it I claim back VAT on the invoice and the fuel but pay it on what i'm making?
i'll have to have a sit down with my accountant and see how the lay of the land lies.
my other main expense with VAT is fuel -
so I charge my supplier VAT and claim back VAT on the fuel?
or is it I claim back VAT on the invoice and the fuel but pay it on what i'm making?
I was a sole trader same day courier for 8 years, then a limited company for 3 years. At my peak, I had 4 of my own vans on the road, and several subbies.
If you're looking at getting all your work from one customer as a sub contractor, you'll not make a living. You need to find your own customers to make any money. If you're subbing for someone who's always looking for small van OD's, and have to buy a uniform and rent a PDA, you should rethink your plan.
I registered voluntarily from the outset. 75% of my customers were also registered, and it made no difference to them. Non-registered customers were generally a PITA, and not worth bothering with unless it was a backload or filled a quiet day.
If you do register, you charge your customers VAT, and claim VAT on your eligible costs. Every 3 months, you tell HMRC what your sales were, and the VAT element of them, and what your costs were, and the VAT element of them. Assuming you made a profit, you pay the difference to HMRC. If you didn't, you claim the VAT back.
It's not difficult to do, and you can easily do it yourself as long as you can keep invoices and accurate records. Get a fuelcard. You'll only have one diesel invoice a month to worry about.
If you're looking at getting all your work from one customer as a sub contractor, you'll not make a living. You need to find your own customers to make any money. If you're subbing for someone who's always looking for small van OD's, and have to buy a uniform and rent a PDA, you should rethink your plan.
I registered voluntarily from the outset. 75% of my customers were also registered, and it made no difference to them. Non-registered customers were generally a PITA, and not worth bothering with unless it was a backload or filled a quiet day.
If you do register, you charge your customers VAT, and claim VAT on your eligible costs. Every 3 months, you tell HMRC what your sales were, and the VAT element of them, and what your costs were, and the VAT element of them. Assuming you made a profit, you pay the difference to HMRC. If you didn't, you claim the VAT back.
It's not difficult to do, and you can easily do it yourself as long as you can keep invoices and accurate records. Get a fuelcard. You'll only have one diesel invoice a month to worry about.
As above, every invoice you sent out you add VAT to.
Everything you buy you must ask for a VAT receipt. Then every so often you, or your accountant/book keeper, can claim back the VAT portion of those purchases. With mileage allowance you can claim back a portion as VATable. This is the standard rate scheme.
On the flat rate scheme you don't claim back on purchases (other than capital expenditure over £2,000), but you pay HMRC a fixed percentage depending on your industry: https://www.gov.uk/vat-flat-rate-scheme/overview. This scheme is good if you don't have many expenses to claim VAT back on, for example a purely services based industry.
Everything you buy you must ask for a VAT receipt. Then every so often you, or your accountant/book keeper, can claim back the VAT portion of those purchases. With mileage allowance you can claim back a portion as VATable. This is the standard rate scheme.
On the flat rate scheme you don't claim back on purchases (other than capital expenditure over £2,000), but you pay HMRC a fixed percentage depending on your industry: https://www.gov.uk/vat-flat-rate-scheme/overview. This scheme is good if you don't have many expenses to claim VAT back on, for example a purely services based industry.
MadMullah said:
I'm not going to be near the threshold so it will have to be voluntary registration.
Then don't bother - but remember the threshold is a 12 month rolling period (so not calendar based, accounting period based or financial year based). So if you see t/over in month 1 and then multiply by 12 and you think you will come close to or exceed the threshold then register. Of course month 1 may be particularly low, so review month on month, especially if turnover rises.Gassing Station | Business | Top of Page | What's New | My Stuff