I know there have been threads on here already,but I don't feel they have helped me to decide what to do. I'm approaching the VAT limit and unsure whether to go for it and let my business grow and my turnover go over and have to then register, or whether to keep the business small and ensure I don't go over the limit. I've spoken to my accountant and he says it is perfectly fine to try and stay under the limit so long as everything is legit obv. But it will be hard work because I will need to monitor turnover, and reduce the work we are taking on in order to stay under. But to let it go over could be crippling if I only just go slightly over but then have to pay all that VAT, it wouldn't be worth it. Is anyone else in this situation, or been in it and made a good decision? Xx
VAT again, is it really that bad?
- Thread starter beautyJen
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KGsalon
Well-Known Member
I'm in the same position and don't know what to do.
I have been VAT registered before and was killing us but thats because we was on it before going over the threshold.
We are just scrapping it now and don't know what to do for the best.
I obv want to get bigger so going to have to at some point.
There are to options tho, the 20% vat and you can claim all your vat back.
Or there is another options where it's 'I think' around 12% vat but can't claim anything back.
So need to weigh up the option what's more worth while. Do we buy enough stock to claim back but they take 20%? It's a hard one. X
I have been VAT registered before and was killing us but thats because we was on it before going over the threshold.
We are just scrapping it now and don't know what to do for the best.
I obv want to get bigger so going to have to at some point.
There are to options tho, the 20% vat and you can claim all your vat back.
Or there is another options where it's 'I think' around 12% vat but can't claim anything back.
So need to weigh up the option what's more worth while. Do we buy enough stock to claim back but they take 20%? It's a hard one. X
KGsalon
Well-Known Member
if your on 20% vat you can claim back any of your outgoings if they charge vat. If you placed an order and it came to £100 plus vat, you get that back.
If your on the 12% vat you can't claim anything back.
Hope that makes sense x
If your on the 12% vat you can't claim anything back.
Hope that makes sense x
Ange1Dust29
Well-Known Member
Hi Jen.
It is a difficult to decide, do you want to grow the business more? Or do you prefer working on a smaller scale? only you can decide on that one.
There are two types of VAT. 1) that's when you pay 20% of your turnover to HMRC, but you can claim back any VAT that you are charged by other companies. 2) you can go on the flat rate scheme of 13%, but in your first year you get 1% off, so it becomes 12%. Unfortunately your not able to claim any VAT back unless it is a purchase over £2,500.00. The flat rate is less complicated and easier to do. But you would have to calculate which one would be the best option for you. Your accountant should be able to advise you.
But remember it is very difficult to de-register once you have done it and you have to be well below the threshold and have a good reason.
Hth
Carla-Jane
It is a difficult to decide, do you want to grow the business more? Or do you prefer working on a smaller scale? only you can decide on that one.
There are two types of VAT. 1) that's when you pay 20% of your turnover to HMRC, but you can claim back any VAT that you are charged by other companies. 2) you can go on the flat rate scheme of 13%, but in your first year you get 1% off, so it becomes 12%. Unfortunately your not able to claim any VAT back unless it is a purchase over £2,500.00. The flat rate is less complicated and easier to do. But you would have to calculate which one would be the best option for you. Your accountant should be able to advise you.
But remember it is very difficult to de-register once you have done it and you have to be well below the threshold and have a good reason.
Hth
Carla-Jane
