vat

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i'm strickly smalltime domestic with bits and pieces for small builders, don't even turnover £35000 pa, would it benifit me to go vat registered?
 
Pug said:
i'm strickly smalltime domestic with bits and pieces for small builders, don't even turnover £35000 pa, would it benifit me to go vat registered?
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I would say definitely not Pug, although you could claim the VAT back on your vehicle,tools and materials you would have to start charging all your domestic customers 15% VAT at the moment soon to go back up to 17.5%, this will put you at a real disadvantage when pricing up against non VAT registered spreads unless the jobs are very material hungry.
RenderSystems why the hell are you having 20% stopped at source if you are turning over that amount, some firms won't even deal direct with other firms that need to have the 20% stopped.
 
no pug to be honest they would not let you claim your vat on that turnover if you were NOT involved with input vat (material supply) you would have to be over the threshold (67.5k) before they would register you. but if you supply then have a look how much material you supply work out how much of that is vat an have a word with your acc. (remember if you pay for mats all in and charge that price to your customer you are already getting the vat in your pocket so, If you were registered and working domestic or small builder stuff (vat rated work) you would have to charge them vat and pay that back to the HM and claim your vat payed out back for yourself you see what you charge as vat goes back in the HM pot all you can claim is what you paid out in vat see) zero rated work (new build) you buy mats plus vat but you cannot charge your client vat so you buy your mats and pay the vat but you only get paid cost on your mats then whatever your labour is then you claim your vat back from the HM so your are actually out of pocket on the materiels for three months or so. I stayed off vat until my acc. said go but we stayed away on purpose now i dont have a choice but if your pullin 35 per ann you are more than happy yeah as you are yeah?
I should av just said no here shouldnt i
 
plasterjfe said:
no pug to be honest they would not let you claim your vat on that turnover if you were NOT involved with input vat (material supply) you would have to be over the threshold (67.5k) before they would register you. but if you supply then have a look how much material you supply work out how much of that is vat an have a word with your acc. (remember if you pay for mats all in and charge that price to your customer you are already getting the vat in your pocket so, If you were registered and working domestic or small builder stuff (vat rated work) you would have to charge them vat and pay that back to the HM and claim your vat payed out back for yourself you see what you charge as vat goes back in the HM pot all you can claim is what you paid out in vat see) zero rated work (new build) you buy mats plus vat but you cannot charge your client vat so you buy your mats and pay the vat but you only get paid cost on your mats then whatever your labour is then you claim your vat back from the HM so your are actually out of pocket on the materiels for three months or so. I stayed off vat until my acc. said go but we stayed away on purpose now i dont have a choice but if your pullin 35 per ann you are more than happy yeah as you are yeah?
I should av just said no here shouldnt i
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So do you charge your clients the same rate that you pay for materials, ex vat?
If so, why should you pass on your merchant discounts to them?
 
I'm not limited and turnover anywhere from £40k-150k, but i'd rather have my tax deducted through CIS than have to find £10-£20k at the end of the year.
 
no pal if its a vat rated job say a domestic- i buy material plus vat and charge them material,labour,any overhead&proffit plus vat. so basically services plus vat i get the material vat back and the remaining vat charged on the service goes back to HM. VAT exempt ie new build I buy mats at cost plus vat but you cant pass the vat charge on as it is exempt so i add any material proffit usually dont bother to the net cost of material and charge the client this and any labour etc then just claim the vat back of the mats later thats the law you see. you cannot charge an exempt customer vat and then claim the same vat back that means you would have generated the vat twice over. see its for the governments gain really vat is tax all tax is there for the benefit of the government. unless you work purely on exemp stuff then you take out more than you put in.
 
so just to confirm, if your limited they don't deduct 20% cis from you, you pay it yourself at the end of the year. That's only for sole traders then is it? If you did a lot of subbing work on new builds mostly on labour only would you be better off not bothering with vat registration?
 
if you are a big firm or ltd company basically you will be operating on a profit that is smaller than the tax you would pay on a job so you get paid gross instead of tax as you go (20%) otherwise you will lose out on every job until the end of tax year when you can claim back, by that time you will be bust. see in the position you mention above goody its a subby workin cis labour only thats it. no vat no gross etc thats the way to stay, not worth worrying about something thats not going to affect you until it does affect you. These situations are for big firms with mass turnovers and mass production hence the reason for small profit margins-EXAMPLE 100k job costs you directly (labour-subbies and materials) 90k you make 10k proffit tax man takes 20k (20%) by applying to be paid gross you pay tax on the 10k at the end of the year to stop you running a loss
 
Becoming a Ltd. company doesn't automatically mean you get paid gross, a firm I use for insulation work are Ltd. but I have to deduct 20%. You can apply to be paid gross when you are a sole trader as long as your turnover is high enough.
 
yeah like i said in the previous post you dont have to, you must apply if you want to do it. It would make sense if you were running a mass production at small proffit, they may not accept the application either. you have to have a reasonable record of keeping your accounts in check
 
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