Value Added Tax (VAT)

[Dan]

Any questions about VAT? (just trying to get a few example posts started)

 

[Fekin]

Do we really have to pay it ? or is it just a cruel rumour...

 

[penno]

yeah i have a question. Heard some people say they are not VAT registered and not planning on. Don't get it really. Going to speak with an accountant next week who should be able to enlighten me more.

 

[Fekin]

As far as Im aware, you only hit the need to become VAT registered if your annual turnover exceeds something like £64.000, or if any one quarter you look like you'd hit that mark.

Example, in your first quarter your turnover was £20,000 then an accountant may say going by these figures you'd hit £80,000 by years end, then may also have to become VAT reg.

 

[GatesheadCol]

And I believe that once you are VAT registered you lose 17.5 % on anything you make after 64k. If your making enough to be VAt registered then well done.

If your not dont bother, more hassle than its worth.

If by Jan/Feb say you looklike your going to hit the 64k - take the rest of the financial year off lol

 

[grumpygrouter]

VAT is a tax on the "consumer purchases". It replaced the old "purchase tax" system a few decades a go. If you a re not VAT registered because your turnover is too low, it would be my recommendation that you stay that way IF your primary target customer is domestic as this would make your pricing 17.5% more competative than a VAT registerd person quoting for the same job at the same rate.

If however, you are aiming at the contracting sector, it may be of benefit to actually be VAT registered as the contractors will almost certainly be so. This would enable you to claim back vat on purchases and other costs, making you margins a little higher.
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And I believe that once you are VAT registered you lose 17.5 % on anything you make after 64k.

If your making enough to be VAt registered then well done.

If your not dont bother, more hassle than its worth.

If by Jan/Feb say you looklike your going to hit the 64k - take the rest of the financial year off lol

That bit is not exactly true GatesheadCOL, if you are VAT registered you must account for it on ALL your income, not just after £64k

Grumpy
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Any questions about VAT? (just trying to get a few example posts started)

You will have opened a can of worms here Dan.LOL

Grumpy

 

[Fekin]

It is a very old post by Dan anyway, I just saw a guest looking at it on whos online, lol

But it is on interest to many on here.

 

[enduro]

I was vat registered, up until two years ago, you can register for vat anytime unless you go over the limit. I found i very handy working for big customers as they take you more seriously, but its a nightmare if you don't put the vat money away as you have to pay it every three months on the dot, you don't mess with these guys. when i used to go to the bank to pay in a cheque, i would work out the vat and go to building society and pay vat in there. So if you want to be a unpaid tax collector go vat registered.

 

[grumpygrouter]

I was vat registered, up until two years ago, you can register for vat anytime unless you go over the limit. I found i very handy working for big customers as they take you more seriously, but its a nightmare if you don't put the vat money away as you have to pay it every three months on the dot, you don't mess with these guys. when i used to go to the bank to pay in a cheque, i would work out the vat and go to building society and pay vat in there. So if you want to be a unpaid tax collector go vat registered.

Spot on Enduro.

Grumpy