Discuss VAT or Not VAT Registered? Commercial or Domestic more profitable? in the Business Related area at ElectriciansForums.net

D

dixon9

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VAT:

I understand that if your invoicing falls below 65K per year you don´t need to be VAT registered.

Advantage is that it is easier to make your quotes more competitive in domestic and certain commercial situations - Disadvantage is that perhaps some customers (Commercial, Industrial or local authorities?) may need your company to be VAT registered to carry out work? No VAT registeration and you lose work?

How many sole traders/small Ltd companies on here are VAT regsitered? Is it worth it?


Commercial or Domestic:

Commercial work does have the advantage of no Part P registration fees I suppose.

Which customers are easier to deal with? Which is more profitable in general?


Any feedback greatly appreciated.
 
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S

sparkyork

although im no where near earning 65k at the moment, i dont think id bother going vat registered anyway, seems like a lot of hassle, alot more paperwork, and an extra 500 pound accountancy bill. it does have its perks i suppose but its pretty much swings and roundabouts when dealing with vat, someones gotta pay it in the end.

a customer of mine asked if i was vat registered and said no im not but i can get invoices from wholesalers made out in your name so you can claim it back still.

domestic or commercial, suppose realistically you'd of thought more in commercial but it depends on the premises and what gear is going in i.e 25k AV systems and all that!

rich
 
S

Spudmiester

  • Thread Starter Thread Starter
  • #3
VAT:

I understand that if your invoicing falls below 65K per year you don´t need to be VAT registered.

Advantage is that it is easier to make your quotes more competitive in domestic and certain commercial situations - Disadvantage is that perhaps some customers (Commercial, Industrial or local authorities?) may need your company to be VAT registered to carry out work? No VAT registeration and you lose work?

How many sole traders/small Ltd companies on here are VAT regsitered? Is it worth it?

I depends who you are working for. If you do mostly domestic, then its a bad idea, as you will be 17.5% more expensive than someone who is not VAT registered.
However , if you are working for customers who themselvs are VAT registered and you are not, they cannot claim the VAT back that you have added into the cost of the materials.
I went VAT registered when I did'nt need to for his reason as my customers are nearly all commercial/industrial.

If you do go VAT registered, get a bookeeper to sort it all for you, then give it all to the accountants at the end of the year, it will save you a lot of headaches, lets face it most of us hate paperwork, we are sparks, not paper shufflers.

Any more questions just ask, will help where I can.

Spud
 
S

sparkyork

hey up if your customer is vat registered and you are not, your customer can claim the vat back if you get your wholesaler to produce an invoice in the customers name. ive had to do this for my client in leeds.

rich
 
D

dixon9

  • Thread Starter Thread Starter
  • #5
hey up if your customer is vat registered and you are not, your customer can claim the vat back if you get your wholesaler to produce an invoice in the customers name. ive had to do this for my client in leeds.

rich
Which means that its difficult to mark up on the materials you bought without the customer knowing how much profit you´ve made on them?

I suppose the solution is NOT to itemise labour and materials - just one job lot price in that circumstance.
 
S

sparkyork

ocontrare (dell boy style) my wholesaler produced an invoice for the customer in there name and stuck my percentage on top of the price. theres ways round things most of the time

rich
 
L

London Luke

  • Thread Starter Thread Starter
  • #7
no way would i go VAT reg if doing domestic work
 
C

Cirrus

  • Thread Starter Thread Starter
  • #8
I used to be VAT registered on an old business cos my T/O was over 50 grand a month. It was a complete nightmare with quarterly returns and sooo much more paperwork. Worse part was writing cheques to the vat man every quarter for thousands of pounds! Only good thing was being able to buy stuff 17.5% cheaper than I could personally so when I needed a new telly, the company did. If I wanted a new camera, it was of course for the company etc..:p
 
N

nick22

  • Thread Starter Thread Starter
  • #9
Hi all
Just completed vat returns for 1st year, flat rate vat at 8.5%, but also a 1% discount for 1st year.
Not too sure how I should have calculated this but I have done the following:-
Calculated 7.5% of (turnover inc vat)
I reduced the 8.5% by 1%, giving 7.5%, have I done right?
 
B

bugsy

  • Thread Starter Thread Starter
  • #10
Sage do some very good accounting software, it also allows you to link materials and labour to job's
and create accounts for each job
 
im vat registered and most of my work is domestic. dosent cause me any problems to be honest once your customers know you and like you they are reluctant to go elsewhere as long as you dont take the mick. most customers value highly a recommendation and dont mind paying it.

not sure who said it above but someone said that it makes your quotes 17.5% more expensive - not true. when your not registered you are still charging + vat on parts so its only your labour which is 17.5% more abd lets face it in a particular area rates can vary quite abit anyway.
 
Hi

most of our work is in agriculture and industrial so to me being vat reg is quite important because the customer wouldnt really be interested if they couldnt claim the vat back. We do some domestic work, mainly newbuilds and they are zero rated vat. I think it all depends on the type of work you do. Also when you buy vans and tools you can claim the vat back.....o ye and i managed to find a nice bmw that was vat qualifying... :D
 

ian.settle1

-
Mentor
Arms
Hi all
Just completed vat returns for 1st year, flat rate vat at 8.5%, but also a 1% discount for 1st year.
Not too sure how I should have calculated this but I have done the following:-
Calculated 7.5% of (turnover inc vat)
I reduced the 8.5% by 1%, giving 7.5%, have I done right?

Thought VAT in this country was 17.5%
 
Hi all
Just completed vat returns for 1st year, flat rate vat at 8.5%, but also a 1% discount for 1st year.
Not too sure how I should have calculated this but I have done the following:-
Calculated 7.5% of (turnover inc vat)
I reduced the 8.5% by 1%, giving 7.5%, have I done right?
Yes that looks right, but remember the flat rate percentages changed for the period where we were at 15% so you'll have to account for that. Think it dropped by 1% so for everything you charged 15% on you'd pay 6.5% to the VAT man and everything you charged 17.5% on would be 7.5%. Then when your first year is over you'll have to pay 8.5% like the rest of us (depending on the dates on your invoices of course ;-) )
 
N

nick22

  • Thread Starter Thread Starter
  • #15
Hi Cornburn

Thankyou for your confirmation

Kind regards Nick
 
G

Graeme Harrold

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  • #16
VAT Registration does have a compulsory start limit, however if you are below this you can register voulentarly, which Im considering this year. Basically all you are is an unpaid tax collector.

Two schemes operate.

You pay VAT on purchases at 17.5%, then invoice your customer at 17.5%.

e.g. you buy something at £10 VAT = £1.75
You then sell at £20 VAT = £3.50
You pay the Tax man the difference.

On the flat rate scheme there are different values for different industry sectors and 8% is currently for sparks (plus a 1st year discount of 1%). This is calculated on your annual turnover so keep track of it over the year!!!!

Accountant definately, but a good one should save you more than you pay.....shop around!!!
 
K

kung

  • Thread Starter Thread Starter
  • #17
If i get near the VAT limit im off on holiday on a business trip to look for new customers and buy tools etc etc no way do i do anymore for the taxman than i need and as said esp in recession times we have enough trouble getting work as people want the cheapest price done so if i add 17.5% vat ontop of my price then i may as well go back on books as paye ! might be diff in commercial/ind as they dont mind what they pay for a tax dodge just like company meals etc but in domestic in this day and age most of the time the pub bloke wins most jobs as when they employ us they pay extra thats all they know not what it costs us to get where we are in fee's so for me i wont go vat reg i dont believe its worth it as i mainly do domestics as long as im reg with a scheme opp and all legit and sign the job off their happy.
 
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