starting a new buisness, could i claim back the vat on the equipment that i bought if im not vat registered. should i register or stay clear. working as sole trader wont reach the £70k threshold.thanks for any views, stridlass
VAT registration yes or no
- Thread starter stridlass
- Start date
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lucelasticx
Well-Known Member
Steer clear until you HAVE to register!!
Ruth Mills
Well-Known Member
No, you can't claim the VAT back if you are not VAT registered.
Also, if you're on the flat rate scheme for VAT, you can only claim the VAT back for capital purchases of over £2000 in one go.
If you are definitely going to be under the VAT threshold, then I'd advise *not* to register for VAT... as if you *do* register for VAT, then you have to charge 17.5% VAT (20% come January) on everything you do - and that's even before you start thinking about income tax and national insurance - which would be paid from your income net of VAT - before you even get a penny!
For most people in the beauty industry, a significant expenditure is going to be time (therapist wages etc) - which will generally be greater than product costs. In which case you'd almost certainly pay more to the VAT man on VAT on top of staffing costs than you'd get back from the VAT man by claiming VAT back on products etc... in which case it's just not worth it - especially given the additional accounting complexity and the hassle of having to submit quarterly VAT returns!
Also, if you're on the flat rate scheme for VAT, you can only claim the VAT back for capital purchases of over £2000 in one go.
If you are definitely going to be under the VAT threshold, then I'd advise *not* to register for VAT... as if you *do* register for VAT, then you have to charge 17.5% VAT (20% come January) on everything you do - and that's even before you start thinking about income tax and national insurance - which would be paid from your income net of VAT - before you even get a penny!
For most people in the beauty industry, a significant expenditure is going to be time (therapist wages etc) - which will generally be greater than product costs. In which case you'd almost certainly pay more to the VAT man on VAT on top of staffing costs than you'd get back from the VAT man by claiming VAT back on products etc... in which case it's just not worth it - especially given the additional accounting complexity and the hassle of having to submit quarterly VAT returns!
Last edited:
SparkleJeanie
Well-Known Member
My husband is an accountant, and i still do bookkeping for one business which involves quarterly vat returns. Ruth has sumed it up pretty well. I know it's horrible having to pay vat on our purchases, but i'm sure we would all loose loads of clients if we charged vat ontop of our prices.
