Going from non VAT registered to VAT registered.... Help

[sythai]

Hi Chaps,

(have tried searching on this, put in VAT and nothing came back ?)

Would like to see if anyone else has been in similar situation to me. I realise I can speak to my account for advise but would rather get a lo down from you chaps on here.

Basically the way things are going (OTE) I'm going to be over the VAT threshold for this year (end April 2012.)

Nice to be busy, but I don't want to be in a situation where I'm going to turn away work as soon as I've reached that level or take time off, cant afford to.

60% of my client base are domestic customers
40% of remainder are VAT registered

So if it does happen next year am I going to see a drop in the jobs I am successful in winning ? Have to reduce my prices to allow for VAT ? Should I worry ? Is this a sort of natural progression ?

Any thoughts please,

Many Thanks,

Sy :smiley2:

 

[Darkwood]

When/if you become VAT registered it shouldnt effect you too much, you domestic customers already pay the VAT on the materials for the job as do you when buying them, the only difference once reg' for Vat you will have to charge them VAT on Labour but you can reason with them by reducing the bill by the VAT amount on labour without making a loss because now your registered you can claim back all VAT on materials and business related expenses. The hardest part is explaining this to customers as your bills will now show all the VAT costings of the bill as you will be required to show it.

 

[sythai]

I currently price 95% of my work by point, therefore not having to work out a break down of labour + mats... does this mean that I would have to therefore work all my pricing out on a separate labour and materials basis ?

Thanks for your help,

Sy

 

[Darkwood]

Yes the paperwork is a farce at first until you get used to it, you need to clearly record all inputs and outputs etc, although you dont have to on the final customer bill you can just show the price but you are required to have your vat no' on the bill and net amount (without vat) and Vat amount then total amount. Took me a while to get head around it all but you would do good investing £20 in a Business Accounts book fot VAT registered companies also go onto the HMRC goverment run website and read up on it and get them to send you some info out, a good accounting software is also adviced which will have the billing format templates already loaded.

 

[sythai]

I'm pretty good with all my book keeping... but does like a right pain though ! Oh well just have to see what happens.

 

[sythai]

Thought I'd get a better response there...:sad_smile: thanks for your advice anyway Darkwood :icon14:

Might see if I can repost in the general forum :bucktooth:

Sy