VAT registered

[buttons]

Has anyone had the miss fortune of having to become vat registerd. I now have crossed that magic number but i do have 3 members of staff its so unfare that it goes turnover not profit. But what do i do regarding my treatment prices. I'm due an increase anyway but that will be swallowed up by payin the tax man 17.5% I cant incease it that much id have no clients left. Does anyone have any advice? xxx

 

[number1kitty]

Vat registration works both ways. So while you see that your paying 17.5% on all your treatments remember you also get to claim it all back too off anything your business uses, such as products and equipment.

Once you take off this proportion then it works out at maybe 10%. And this isnt unreasonable to up your prices by.

If your business drops below the Vat threshold in a year you can deregister.

There is also discounts available that can save you about 2% so ask customs and excise how these can be applied.

If your VAT registered you need to advertise your VAT number on your reciepts and you need to break down the VAT percentage of your sales.

Its really easy to deal with and if you have a good head on you you should find it a doddle! If you have any queries etc call customs and excise as they are really helpful. They will also send you out information packs which tells you everything.

If you have a good accountant speak to them about your worries as they will help you.

Also a good accounts package like Sage help with things like your VAT returns and it saves you time.

VAT can be paid monthly, quarterley or annually. I prefer monthly.

Hope this helps

Kate

 

[buttons]

Thank you Kate thats help me lots. I knew that in real term it wouldnt be exactly 17.5% i would loose to tax man because of money you can claim back but didnt think it would be as little as 10% so pleased with that. When you say discount. Why would you get this and do you mean for exampl you have to pay 15.5% instead of 17.5%? Sorry for all questions and thank you again for help x

 

[number1kitty]

First it depends on what you buy in your salon to use to how much its reduced by, but you personally should have a rough idea what you have spent over say the last 12 months alone on products to use on clients, disposables, phone bills, and loans etc (which also charge VAT). Its surprising what you get back.

The VAT office do a couple of schemes and off the top of my head I cannot remember how they work. I think its either a first VAT year reduction or a small business reduction or it may have been because I paid monthly for the first year.

Do you have an accountant that can talk you through it??? If not call Customs and Excise and they will tell you what your eligible for. I think (but not 100% sure) that you may be able to claim back the last 3 months of your VAT that you have paid. Its worth asking them, and I have called them asking many daft questions and they have always been really nice and helpful to me.

I did my boyfriends tax returns for his company myself quarterly, however he registered with a bad accountant and got put on a normal VAT scheme.

I then took over and found out all that I needed to know from the VAT office, and had it all corrected.

My business I registered straight away and reclaimed back all my start up VAT and then deregistered until I hit the actual threshold. By this point I had a brilliant accountant who did it for me for a fiver a month! I have sage though so i just send my accounts to her monthly and this is why shes cheap because the work is done for her.

Have a flick about on Business support, information and advice | Business Link as they are an excellent source of info for business'.

Kate x

 

[Scu8a8uddy]

As a small business you can register with Customes & Excise as such and just pay 11% VAT for your first year and 12% after that (for businesses with turnover of up tp £225000 per year). You will not be able to claim any VAT back but as a small business you will find that this is more beneficial to you (and easier to calculate) than paying 17.5% on all turnover and claiming back 17.5% on all purchases. One exception would be single item purchases you make over £2000 (?) - on these you can claim back the VAT.

Hope this helps - it should do - I've just saved you about £5000 + a year!!! LOL.

Nick

 

[Saya]

Quick question..
I've just registered, even though I am not up and running and still getting my head round how it works?
I have been advised to keep all my receipts for any expenses.
Am I correct in saying that the VATs can be claimed back from these, no matter how small the receipt is? at the end of the year?
And as I've not carried out any services myself, I won't be paying anything myself?

 

[number1kitty]

you can claim up to 3 months worth I think, however I register for the first couple of months and claim back all my start up costs then de-register by saying that I dont think I will reach the minimum amount needed.

Naughty I know but it saves me thousands! And after all loopholes are there for a reason!

Kate x

 

[Saya]

hmm..interesting ; )
Now where are those shopping receipts?....