VAT on Van

[Midwest]

I am about to retire and set myself up as a Sole Trader. I'mthinking of starting my business before I retire. I will obviously need to getsome Tax advice, but I'm thinking of buying a van shortly. My question is wouldI be able to retrospectively be able to claim back the VAT or should I waituntil I become self-employed before I purchase a van?

 

[Octopus]

As a sole trader you need a turnover of about £74K before you can think about VAT, so you should do all your sums on the basis that VAT will be paid and may not be reclaimable

 

[Midwest]

Okay thanks. Seems I have alot to learn!

 

[Welchyboy]

but in answer to your question yes you can claim VAT back on major items upto 3 years after purchase retrospectively

and if you feel it will benefit your business you can register for VAT at any income level it only becomes mandatory if you gross 74k in any 12 consecutive months(not at your end of year accounts, dont get caught out)

 

[telectrix]

register for vat, buy your van, start trading, claim the vat back for the van. after a few months, decide whether it is worthwile to be vat registered and if not, then de-register.

 

[Octopus]

register for vat, buy your van, start trading, claim the vat back for the van. after a few months, decide whether it is worthwile to be vat registered and if not, then de-register.

And during the time you're VAT registered you'll have the VAT headaches too

 

[needasparks]

Be warned, Once they have their claws in you, they don't like to let you go. We are afterall just cash cows for them.

 

[Ponty Massive]

register for vat, buy your van, start trading, claim the vat back for the van. after a few months, decide whether it is worthwile to be vat registered and if not, then de-register.

But then if you de-register, you'll have to repay all the VAT you have claimed on any assets you have.

 

[Welchyboy]

to be honest i would prefer to be VAT registered, my accountant says he would do my quarterly returns for £200 a year(as long as they are organised ok)

theres alot i could claim back on that im currently losing, and other companies are allways moaning at me cause im not registered, its just the domestic customers it hits and makes you uncompetitive, but thats an area im keen to leave behind as soon as im able

 

[supasparxs]

register for vat, buy your van, start trading, claim the vat back for the van. after a few months, decide whether it is worthwile to be vat registered and if not, then de-register.

I agree with telectrix,
the big question you have to ask is what sort of customer are you looking to get?

If the customer is a company who is VAT exempt then they will want you to be VAT exempt

If your prospective customer is not they won't

everything you but for a customer is VATable
So the customer will pay the VAT on the materials no matter what.
If they are VAT exempt they can reclaim that money. if they are not, they can't

(new build domestic is different as there is no VAT on new builds)

Talk to an accountant, as this is a tricky question and the answer is different in almost all cases

good luck

 

[Midwest]

Thanks chaps for your replies. It is a complicated area, and it will be made worse by me receiving a company pension when I do retire and start sparkying (I intend to do just small domestic work). I think I need to speak to an accountant :nonod:

 

[Octopus]

Do let us know what he advises. I think he'll suggest Sole trader

 

[Midwest]

I've had the same advice about Sole Trader from a work colleague who's taken the same retirement path. I just need to understand the finer details.