DSF

accdave;39170 wrote:If you're not registered for vat and you buy something that is £10+vat = £12, then sell it for £20 your margin is £8.

If you are vat registered then you're buying the same thing at £10 you need to sell at £21.60 to retain your £8 margin £18 +vat.

On my basis you wouldn't need to raise your prices by 20% or am I miles out ??

Why is everyone always so negative about Vat. Dont forget you also get to claim all sorts of Vat back as well. Fuel and other costs. If you buy some machinery or a web site you get the vat back. You have to look at the whole picture.

Personally I wouldnt have any problem paying a huge vat and tax bill because it would mean I am earning a huge amount (Unfortunately I'm not doing either - but I am Vat registered)

gstk;39282 wrote:Why is everyone always so negative about Vat. Dont forget you also get to claim all sorts of Vat back as well. Fuel and other costs. If you buy some machinery or a web site you get the vat back. You have to look at the whole picture.

Personally I wouldnt have any problem paying a huge vat and tax bill because it would mean I am earning a huge amount (Unfortunately I'm not doing either - but I am Vat registered)

Yes i agree.

it`s actually your customers are paying the vat you`ve collected from them

I would imagine if you are registered then you will get more work from businesses that will want a VAT receipt from you so they can claim the VAT back and they can also claim the receipt against their taxes as well. Not sure if that is possible with a non VAT receipt.

Earl

Earl Smith;39286 wrote:I would imagine if you are registered then you will get more work from businesses that will want a VAT receipt from you so they can claim the VAT back and they can also claim the receipt against their taxes as well. Not sure if that is possible with a non VAT receipt.

Earl

Thats also a valid point. Not only does vat registered show a degree of being a legit business - it also allows a company to claim the vat back. (Although if its promotional items for a company that is tax deductable anyway) It all depends on what market you are trying to supply.

Its horses for courses - if your customers are mainly companies, you'd be better off being vat reg. If your customers are mainly the public, and your not near the threshhold (think it around 73K), then its pointless.

Been registered for 9 years now and just sent the forms off to be de-registered - still waiting for a reply :rolleyes:

We've been vat registered for 20 years, like John 1 of our businesses is soon to be de registered.

John, Mandy.
What's happened that youre deregistering from VAT.

Is business that bad or are you following some natuarl shrinkage strategy in light of current times?

Business is that bad, :frown: and i'm falling way beneath the threshold. Also, a lot of my custom these days comes from Joe public, instead of the councils and police forces I used to deal with a few years back.

Cheers John

I have always been vat registered, I just wanted to point out in a few (mathmatically incorrect) points some possible business growth paths, and in particular, of starting on a low cost/budget route.
For many smaller businesses, - and all private individuals - stag/hen etc - the extra vat does make the product more expensive, and by quite a factor, - it is challenging competing with non registered alternative suppliers .....
For any vat registered business turnover below £175 k - take a look at the flat rate vat scheme
here is a link:
http://tips.hrbs.biz/vat/flat-rate-vat-scheme/
I save between £4 and £5k per year on this! - almost a disincentive to grow my turnover back above this level again .....
P

Don't forget that if you are vat registered you should be able to clam £1.66 vat back on the £10 t-shit purchase so you would have to sell for £19.61 including vat to retain you £8 profit, then you need to account for roughly £1.60 tax on that profit