Vat Registered

[CadenceAlex]

Is anyone voluntarily VAT registered?

I was advised that since we spent so much on start up, for machinery.. work carried out.. and the 10k 3 phase... plus VAT on all stock we buy, plus nail products/lotions/potions and any work/repairs.... (which comes to a hefty sum when all added up).... that we should register for VAT as we can reclaim all this money.

Can anyone shed any light on this?

 

[pure]

It can be worth it depending on your turnover. Just remember that you can not only claim back tax on your purchases, but you also have to pay tax on everything you sell, including services. Speak to your accountant or the tax office, they will be ablet o give you lots of advice.

hth :hug:

 

[Sparklepink]

id speak to your accountant... personally i wouldnt be vat registered unless you have a higher income and need to be.... thats what my accountant advised me

Jess
xox

 

[oey]

My understanding is that it is OK to voluntary register for VAT when you are setting up and have a high amount of outgoings. The problem is that once you have claimed this lot of VAT and thing go back to normal with claiming and paying VAT on your regular outgoings and income then you will be worse off unless you increase your prices to cover it and it wouldnt be quite so easy to de-register!

 

[bexi]

If you are VAT registered you ahve to produce accounts every 3 months. It also difficult for us to charge VAT you cant say the facial is x amount and with VAT its x amount.

my accountant who is also my sister in law advised against it for as long as possible.

unfortunalty vat is just one of those things!

 

[eager beaver]

Is anyone voluntarily VAT registered?

I was advised that since we spent so much on start up, for machinery.. work carried out.. and the 10k 3 phase... plus VAT on all stock we buy, plus nail products/lotions/potions and any work/repairs.... (which comes to a hefty sum when all added up).... that we should register for VAT as we can reclaim all this money.

Can anyone shed any light on this?

although you save money at the start, your accountant fees will be higher, as you have to keep producing accounts, and the VAT eats alot of the profits. Many people have to keep prices high just to break even. as others have said, i would get advice from a variety of sources so that you get sound advice, one source may be bias! HTHs

 

[Monkeystails]

Hi,

Here is a website you can look at:

http://customs.hmrc.gov.uk

It is the official HM Revenue & Customs who you would claim & pay your VAT to and it has very useful information under the Businesses section.

However, in a nutshell, the current registration threshold for taxable supplies is £61,000. Now when you think about it, to voluntarily register, you can claim 17.5% on all vatable items/services you have spent to open your business. But you do also have to charge vat on all services and items you sell. This does not benefit you at all because that 17.5% all has to be paid back to the vat man too! Let's say you spend £500 per month on purchases of stock for re-sale/services, you need to claim that 17.5% (approx £74.50)back. Then let's say you earn £2000 on sales/services you provide. You will then need to pay the vat man approx £300! Take £74.50 away from £300 and you are actually paying more than you're claiming. It is much more worth your while paying vat if you're in an industry where purchasing stock and sales of stock are the main part of the business.

I hope that helps and has made sense!

Georgie. xxx

 

[CadenceAlex]

Hi,

Here is a website you can look at:

http://customs.hmrc.gov.uk

It is the official HM Revenue & Customs who you would claim & pay your VAT to and it has very useful information under the Businesses section.

However, in a nutshell, the current registration threshold for taxable supplies is £61,000. Now when you think about it, to voluntarily register, you can claim 17.5% on all vatable items/services you have spent to open your business. But you do also have to charge vat on all services and items you sell. This does not benefit you at all because that 17.5% all has to be paid back to the vat man too! Let's say you spend £500 per month on purchases of stock for re-sale/services, you need to claim that 17.5% (approx £74.50)back. Then let's say you earn £2000 on sales/services you provide. You will then need to pay the vat man approx £300! Take £74.50 away from £300 and you are actually paying more than you're claiming. It is much more worth your while paying vat if you're in an industry where purchasing stock and sales of stock are the main part of the business.

I hope that helps and has made sense!

Georgie. xxx

Thank you very much for taking the time to explain in simple terms! :green: