VAT registeration

[Lilliesmum]

Hi,

I am trading as a self employed consultant and am registered as self employed with HMRC. I haven't reached the threshold for having to register for VAT but am considering doing so.

The main reason been to add credibility to business. I don't want to go Ltd and feel having a VAT registeration would say to potential clients that I'm a - more profitable than I really am and b - running the company legitimately.

Do you agree or should I leave things as they are?

[MyAccountantOnline]

Hi,

I am trading as a self employed consultant and am registered as self employed with HMRC. I haven't reached the threshold for having to register for VAT but am considering doing so.

The main reason been to add credibility to business. I don't want to go Ltd and feel having a VAT registeration would say to potential clients that I'm a - more profitable than I really am and b - running the company legitimately.

Do you agree or should I leave things as they are?


Its certainly a very valid reason for registering for VAT and one of the reasons people will make a voluntary registration.

Are your clients mostly VAT registered?

[elainec100@cheapaccounting]

Have a read of this on vat registration:

http://www.franklyaccounts.co.uk/glossaryvathelp.php

[Lilliesmum]

Hi Nicola and Elaine,

I have to say I am impressed with the speed!

Yes all my regular clients will be VAT registered. I'm a HR Consultant and the smallest company I have has 10 employees so by the time they've covered there wages they must be over the VAT threshold.

My Dad thought it would be too much of headache for me. But I think I can cope I do my own tax return etc. Love him to bits but he seems to have gone all cautious over the last couple of years!!!

[Williams lester]

You may also be able to make a profit out of VAT registration by joining the flat rate scheme. It is worth talking it over with your accountant to see how the numbers stack up.

[MyAccountantOnline]

Hi Nicola and Elaine,

I have to say I am impressed with the speed!

Yes all my regular clients will be VAT registered. I'm a HR Consultant and the smallest company I have has 10 employees so by the time they've covered there wages they must be over the VAT threshold.

My Dad thought it would be too much of headache for me. But I think I can cope I do my own tax return etc. Love him to bits but he seems to have gone all cautious over the last couple of years!!!

You should therefore just be able to add VAT to your current charges so financially its good too.

Dealing with VAT isnt too bad once you get started - its made much easier if you use an accounting package to keep your records. Most decent packages will effectively prepare the VAT return for you.

If you use an accountant ask them about the VAT flat rate - it may depending on your circumstances be worthwhile. If you dont use an accountant or want to do some reading have a look here - http://www.hmrc.gov.uk/vat/start/schemes/flat-rate.htm

[MyAccountantOnline]

You may also be able to make a profit out of VAT registration by joining the flat rate scheme. It is worth talking it over with your accountant to see how the numbers stack up.


Great minds Dave;):)

[Lilliesmum]

Hi,

I use Quickbooks for my accounts. I'd never thought of making a profit from it! Thank you all for you advice - greatly appreciated.

[elainec100@cheapaccounting]

Remember that the 'profit' is taxable though!

Also look at claiming any vat back on costs prior to registration. Details here:

http://www.franklyaccounts.co.uk/glossaryvathelp2.php

[useyourspace]

Hi i personally think vat registered firms look more credible, just a word of caution i applied for vat registration as we went over the threshold. I applied june 2009 we are still being processed. Countless letters from me and my accountants and the response is we are being processed!! I am charging vat at my accts reccomendation as HMRC have told us we will be accountable for vat from june 2009 - crazy state of affairs. Its now got to the stage that HMRC are ignoring letters from me and my accountants.

[Seamless-Outsourcing]

When I used to invoice without a VAT Registration I was always asked what my VAT was and when I said I am not registered that response wasn't a very good one so I can totally understand where you are coming from.

[paulears]

Businesses are used to dealing with other businesses who are VAT registered, so sometimes it's annoying when you receive an invoice and cannot (as you assumed) claim the VAT - I was below the limit when I registered and to be honest, it has been worthwhile for me - especially when you are spending lots building up equipment inventories - so a refund was quite normal for quite a while. The paperwork, if you do it on-line is hardly anything. You press a button or two and your accounts software tells you what to put in the boxes, and after you've stuck them into the VAT website, it should calculate the payment exactly the same - it's been quite simple really.

[benstege]

I would definitely go VAT registered, easy thing to do and accounting software makes filing returns a breeze. Check out any of the web based packages (using FreeAgent Central ourselves), some can even do the VAT returns to HMRC directly!