Accountancy question

[t-s]

I'm in the process of setting up on my own, and I'm looking into getting a van on finance. My question is having set up a ltd company if I get the finance on the van in my name can I claim the vat back and tax through the company or would the loan have to be under the company name (think I will have difficulty being accepted as company was only set up a week ago)

 

[Guest77]

Firstly I strongly recommend you do not buy a van on finance if your brand new into the business. Taking on a 300 quid a month dept your stuck with for 4 years won't help your cash flow in these very early days. Buy a van for 2 grand cash and look after it, then in 3 years time if you have made money or are making money then upgrade the van, JMO.

 

[telectrix]

cracking advice from shrek. ( that's for the van. don't take any advice from him on beer, though. he's got a stomach lined with titanium and drinks cackfowl ).

 

[t-s]

Appreciate the advice and I know what your saying, but I have a lot of work on and I will be covering some miles so I really needs something reliable, only looking at spending around 5000 and putting a deposit down so payments won't be high plus while I'm busy I intend to pay off as much as I can off the finance so that I the work drops off it's less to fork out for.

 

[Guest77]

If you buy the van in your own name then you won't be able to lose the Vat, but you will be able to lose any money you put down on the van as tax deductable as you will be self employed. You will be able to get mileage running it, 44p a mile from memory.

 

[HandySparks]

...but you will be able to lose any money you put down on the van as tax deductable as you will be self employed. You will be able to get mileage running it, 44p a mile from memory.

One or the other, not both.

It's either actual expenses or the 45p/mile for use of own vehicle on business mileage.

 

[Deleted member 26818]

In order to claim back VAT, you have to first register.
Then you have to charge VAT on what ever work you do.
Then you pay that money to the VAT man.
If you get something wrong, they fine you.
If you are late making a payment, they fine you.
If you are late paying the fines, they fine you.
They charge interest on late payments.
They come and inspect your books whenever they want.
They can turn up at 7am, and it doesn't matter that you have work booked for that day, they can just take over your office or home, and go through all your paperwork.
If they want, they can take all your paperwork and your computers away to their office.
If they find that you have underpaid VAT at any time, you get fined and charged interest from whenever you should have paid, up untill you do pay.

You become an unpaid Tax collector who can be fined for any errors you make.

 

[Octopus]

I'm in the process of setting up on my own, and I'm looking into getting a van on finance. My question is having set up a ltd company if I get the finance on the van in my name can I claim the vat back and tax through the company or would the loan have to be under the company name (think I will have difficulty being accepted as company was only set up a week ago)

You need to see an accountant as this post raises a number of difficult questions that only a tax specialising accountant can answer.

A couple of hundred now IS a price worth paying!

Sole trader in year 1 matey - less hassle, less risk

 

[johnsparks23]

The capital allowance figure is rising, according to my accountant. So you'll be able to claim a fair amount back on you van expense. I f I were you , I'd not get carried away in
your first yr of trading. Think the thresh hold for non-voluntary VAT is £81,000
Before that an accountant would rarely encourage voluntary VAT registration. It will be an expensive, time consuming ball ache.
go limited if your at risk financially, which no Doubht you will be, with new customers.

 

[plugsandsparks]

Keep the van in company name, keeps it simple, you may have to give a personal guarantee for the finance company to offer a deal on the van. That's assuming your personal credit score is better than your companies...lol

 

[t-s]

I realise that vat and ltd is not great for new startups, but the work I'm doing there isn't really a choice . I know I need an accountant just trying to find one that comes recommended. I'll see what I can get reggae ding finance in the company name I just have my doubts, just thought if ask the question as I thought people on here may have been in similar situation

 

[Guest77]

Give these a ring, ask for their prices and ask if they give a free initial interview and advice on setting up, what the software they recommend etc etc, just don't pay anything at the set up stage, an accountant should have to impress you

Accountants in Darlington County Durham - Mitchell Gordon

 

[johnsparks23]

I can highly recommend NJB-taxback.co.uk
Nicholas James Brown.
07547 472 281
HMRC Approved agent.
He represents my self and many sparks I know personally.

 

[Spurs]

Lease a van. With your niceic membership you can get an enhanced deal at pergoet. Will cost in the region of £200.00 per month and you can claim the vat when you become registered. Also its tax deducible as a business expense. Who needs to own a van which losing value every day?
The best advice as above is to employ an accountant who operates in our field asap.
good luck though.

 

[Thewiz]

Are you on your own or do you have employee's? 80k is a he'll of a lot of money to turn over on your own. Especially start up. 200 a day everyday will earn you 48k a year so 30k on materials. My advice is to try your best no to go vat registered. Until the accountant forces you to. We turn over 15-20k a month so we have no choice.

It's a pain in the ---.

 

[marc8]

Hi all, when I first started accountant said do not go for VAT do no do this & that ECT. Why worry about being VAT registered especially at the moment VAT 20% TAX 20% so they are equal. So on start up I would not bother unless work you are doing is VAT excempt or at a less rate.
Reason is if you are doing normal private work you will be 20% more expensive & really with both percentages being equal you will get 20% against tax at end of year for all your expenses ( inc VAT you have paid out) but you won't have a VAT bill every quarter.
I am however VAT registered but I do quite a bit of new build, but even then if it is a one off new build I would not bother. Hope it makes sense & good luck

 

[t-s]

I really want to stay away from domestic as much as I can, the customers I have are commercial and will not touch anyone who is not VAT reg so it was really the only way to go for me. Thread development bought a van on finance in the companies name so no problem. Bought a caddy maxi really nice drive, plenty of room and being a vw should be solid. First day trading Monday wish me luck, thanks for the advice

 

[marc8]

Good luck, hope it works out but if you take anything from advice given get an accountant

 

[edrobbo8]

Good luck, hope it works out but if you take anything from advice given get an accountant

I agree - if I have to pay my accountant £600 each year, and he saves me paying £3000 tax, it is a no brainer!

 

[Deleted member 26818]

I don't pay an accountant, and I save myself £3600 a year.

 

[Guest77]

Hi all, when I first started accountant said do not go for VAT do no do this & that ECT. Why worry about being VAT registered especially at the moment VAT 20% TAX 20% so they are equal. So on start up I would not bother unless work you are doing is VAT excempt or at a less rate.
Reason is if you are doing normal private work you will be 20% more expensive & really with both percentages being equal you will get 20% against tax at end of year for all your expenses ( inc VAT you have paid out) but you won't have a VAT bill every quarter.
I am however VAT registered but I do quite a bit of new build, but even then if it is a one off new build I would not bother. Hope it makes sense & good luck

Can you clarify this point please?

 

[marc8]

To clarify
if I go to wholesaler they charge me VAT on goods if I am not VAT I still pay it, at end of year my materials bill for example is £50000 therefore I get £50000 pounds comes off the bottom line as I paid full amount & did not claim the VAT as not registered. If I am vat registered then I would have claimed 20% of the value added tax every quarter & would only have a materials bill against tax 20% less.
Also being VAT on private works I would 20% more expensive on labour as I charge VAT

 

[Rockingit]

To clarify
if I go to wholesaler they charge me VAT on goods if I am not VAT I still pay it, at end of year my materials bill for example is £50000 therefore I get £50000 pounds comes off the bottom line as I paid full amount & did not claim the VAT as not registered. If I am vat registered then I would have claimed 20% of the value added tax every quarter & would only have a materials bill against tax 20% less.
Also being VAT on private works I would 20% more expensive on labour as I charge VAT

That's one heck of a simplistic and rather naive take on it!! I think you need to find a new accountant. Have you ever considered everything else that you purchase apart from job materials?!

 

[marc8]

Hi rockingit
they asked me to clarify what I had said previously, this was just an example maybe trying to explain in text is not that easy. Example being just one small bit, do the math if you are not VAT & you pay it when you purchase something then you claim it at the end of year against your tax. Hope that makes sense & also if you are VAT & you work for homeowners you would be 20% more expensive than the guy who is not VAT because you charge it on top of your Labour.

 

[Octopus]

Hi rockingit
they asked me to clarify what I had said previously, this was just an example maybe trying to explain in text is not that easy. Example being just one small bit, do the math if you are not VAT & you pay it when you purchase something then you claim it at the end of year against your tax. Hope that makes sense & also if you are VAT & you work for homeowners you would be 20% more expensive than the guy who is not VAT because you charge it on top of your Labour.

I would recommend you consult an accountant!

 

[marc8]

Have a good one thanks this was the view of my last accountant about six years ago

 

[plugsandsparks]

I really want to stay away from domestic as much as I can, the customers I have are commercial and will not touch anyone who is not VAT reg so it was really the only way to go for me. Thread development bought a van on finance in the companies name so no problem. Bought a caddy maxi really nice drive, plenty of room and being a vw should be solid. First day trading Monday wish me luck, thanks for the advice

Good luck.. hope it goes well. FWIW, I went VAT reg and Ltd from the very first day for the reasons you give. The odd domestic I do, in theory and on average I will be 10% more expensive overall which I can easily justify. Have also done a few new builds which were zero rated anyway and being VAT reg meant that I could invoice for both materials and labour at zero VAT. I do VAT once a quarter and its a doddle, cannot understand why all the fuss.....