Not being VAT registered - Is it bad?

[Robert74]

I am thinking about signing over my shares in my current company to my business partner and starting up a new venture on my own.

If I do I would imagine my turnover would be around £50,000 and so I would not have to register for VAT. I will have no outgoings so would not need to claim VAT back on anything

Most of my clients will be SME's (20-60 staff), from a client point of view would this be frowned upon? Could not being VAT registered restrict me in anyway?

[KateCB]

As a new start up, probably not; SME companies don't generally mind nt having to pay VAT - we are VAT registered, and obviously claim VAT paid out back, but it helps cashflow if you don't have to pay it to start with!

the number of salespeople that have said to me 'Oh its £3500' and then the invoice arrives ad actually its £3500 + VAT - yes I can claim it back (anywhere between 1 week and 3 months later depending on when the return is due!) but you have to HAVE it available to start with!

Why not ask your potential customers which they prefer?

[MyAccountantOnline]

I dont think it would 'restrict' you - but some customers may perceive you as being a smaller enterprise and perhaps less professional??? (Unfairly)

But if the majority of your customers are VAT registered the only cost to you of being registered is the admin of dealing with your quarterly VAT returns which is pretty minimal if you are using some decent accounting software. You also then get to recover VAT on any costs.