VAT on treatments

[Lpolky]

Hi guys,

I’m try to get my head around vat...
I am currently not charging vat but next year will be vat registered so need to increase my treatment prices.
I am concerned it will make treatments quite expensive.
So ideally now I charge £25 for shellac manicure but will need to be £30

Has anyone else had to increase treatment prices?

What’s the pros and cons of vat?

Thanks in advance


x

 

[EssexFreelance]

Do you mean you will be over the vat or tax threshold - one is £11k the other one is £85k or something I think?

 

[z103]

V.a.t threshold is £83,000.

 

[Lpolky]

Yes over vat threshold so £83k plus

 

[Lpolky]

I’m guessing as I claim back my vat it won’t matter if I don’t put all my treatment prices up 20%?

 

[EssexFreelance]

I haven’t heard of a business increasing prices to include vat it’s always included in the prices. If you can increase your prices if your busy anyway then great but would your clients go from £25- to £30 for gels (the that would be £24 excluding VAT). Most businesses wouldn’t have a 20% price increase

 

[lolaw]

I went Vat registered a couple of years ago and struggled at first as I couldn’t just increase all my prices by 20%. My main outgoing is wages and you can’t claim VAT back on that so it can be hard to pay the vat bill when it comes in. Unfortunately it’s unavoidable though so if you can increase prices by a little bit it will help pay the bill

 

[salonfrog]

VAT threshold is currently £85,000. It increased in 2017, as it does every year.

It’s a dilemma when you register: on what to do with your prices. Some just increase them by 20% to include the vat. Some don’t. And some increase but by less than 20%.

It’s all down to what you think your client reaction will be and what your market rate in your area is.

The key is to explain to your clients why you’re increasing.