is being VAT reg worth the hassle?

[RockCeramics]

:20:Recently i got a letter from one of my building contractor asking for my VAT reg number.
on my letter heads show im not VAT reg , but this got me thinking
"would it be best for me to become registered?"
my turnover has not reached the required point. So at the moment i feel best im not.
This will be my first full yr as a sole trader so i need an accounant and chat with them about this.

what are your thoughts on this?
would you become VAT reg to get the perks and prepared for the paper work?

 

[BTB]

It has it's Pro's and Con's

We are VAT registered, but do a lot of commercial building work so it is good for us.

If the majority of your work is for private clients, you may find that you loose a few jobs because of the increase in price.

As far as administration goes, it's very easy using a basic spreadsheet and setting aside an hour or so each week to enter the figures.

 

[Colour Republic]

Depends on you turnover really to see if it's worth it and if you supply goods to your customers, yes materials are cheaper but you are also more expensive to your customer as labour charges will incure vat

 

[RockCeramics]

thanks
That is 1 point i thought about the increase of pricing
being a small trader this is 1 of my advantages against a bigger company
I knew 1 company that put his vat on a price but was not registered so when they became VAT reg there prices never changed and 1 company caught a wiff of this and removed them from there books.
just cos of that.

 

[Aston]

hi rock ceramics

theres a reason for there being a vat threshhold....if you over it, its worth it, if your not, its not....lol and that can be a good thing in some cases mate..

turnover doesnt tell the real story..your profit is the key to your performance. so i'd say, where possible, legally sail under the radar until theres a point where you have no choice...theres no harm in being a small efficient 1 man 2 man, 3 man team...ive seen more switched on low profile people make more money over the years than the ones who made the jump too early....they were ill advised, and in the end become too expensive because of the vat and priced themselves out of their own market!!!

grumpy is your man for this kinda thing..

just to clarify, there will be loads of people on here who are bathroom specialists, builders and commercial tilers so you will obviously benefit from being vat registered, my example above was to people below or thereabout the vat threshhold :0) thanks...

all the best
ed

 

[mikethetile]

well said aston

a lot of businesses talk about turnover and make statements about the value of work done

when you press about profit they dont know the figures off hand because they have become so impressed with turnover they have forgotten the bottom line

every job needs to turn a profit to remain in business , if you dont know your margins or profit made, how do you know your making money

you could well be just turning over large amounts of cash and not making a single penny

 

[grumpygrouter]

I formed a limited company so I could tile without being VAT registered. My sole trader accounting business IS vat registered so if I traded as a sole trader for tiling too I would have need to be applying VAT to that also. In your position I would not go down the VAT road unless most of your work comes from commercial sources and not domestic.

 

[Colour Republic]

Sorry grumpy? you have a limited company and a sole trader set up? I take it both businesses do different things?

 

[grumpygrouter]

Sorry grumpy? you have a limited company and a sole trader set up? I take it both businesses do different things?

Indeed they do. Sole trader is my accounting services business, ltd. co. is for my tiling.

 

[albyshellshear]

When i had the bakery VAT was a godsend as eveything we sold was zero rated so every quarter i would get a payout from them, when i start the tiling i think like aston said i would sail under the radar untill the time came I was earning good money, i am under no ilusions that it will take time, but dont run until you can walk.