Should I charge VAT

Discussion in 'Accounts & Finance' started by Owen Twidale, Jun 13, 2019 at 2:56 PM.

  1. Owen Twidale

    Owen Twidale UKBF Newcomer Free Member

    5 0
    Hello everyone

    I am reading and reading but not really understanding.

    I am starting a business and completing my cash flow forecast but do not know if I need to charge VAT.

    The business will be delivering training. This will be to individuals not organisations and they will gain a qualification. There will be a mix of self-funded qualifications and fully funded.

    I know that the fully funded qualifications cannot charge VAT as the funds come from government. But do I need to charge VAT on the other qualifications?

    Thank you
    Posted: Jun 13, 2019 at 2:56 PM By: Owen Twidale Member since: Jan 11, 2019
  2. WaveJumper

    WaveJumper UKBF Regular Free Member

    459 71
    Do you think you are going to be over the VAT threshold
    Posted: Jun 13, 2019 at 3:01 PM By: WaveJumper Member since: Aug 26, 2013
  3. Owen Twidale

    Owen Twidale UKBF Newcomer Free Member

    5 0
    We are projecting that we will be over the threshold so will need to register and pay VAT - it is just establishing which products/services are exempt and which aren't.
    Posted: Jun 13, 2019 at 3:06 PM By: Owen Twidale Member since: Jan 11, 2019
  4. Mr D

    Mr D UKBF Legend Free Member

    14,176 1,553
    You do not charge VAT until after you register for it.
    Posted: Jun 13, 2019 at 3:11 PM By: Mr D Member since: Feb 12, 2017
  5. The Byre

    The Byre UKBF Ace Free Member

    8,503 3,291
    If you are starting a business you will need an accountant and that person should be in full command of all the facts and is the person to ask!
    Posted: Jun 13, 2019 at 3:14 PM By: The Byre Member since: Aug 13, 2013
  6. WaveJumper

    WaveJumper UKBF Regular Free Member

    459 71
    My recollection of the rules on this (and I am sure someone with better knowledge than myself will be along soon) is if it's a business supplying training for profit VAT is charged, if its Government funded then not, but you could have situations where its part funded and part not. I would certainly recommend sitting down and getting proper advice from an accountant before you go any further
    Posted: Jun 13, 2019 at 3:18 PM By: WaveJumper Member since: Aug 26, 2013
  7. Owen Twidale

    Owen Twidale UKBF Newcomer Free Member

    5 0
    Thank you all - that does make sense. I just wanted to make sure I was on the right lines. Early planning stages at this point so accountant will come in time :)
    Posted: Jun 13, 2019 at 3:26 PM By: Owen Twidale Member since: Jan 11, 2019

    I_DO_MARKETING UKBF Regular Free Member

    371 97
    Even if you're not registered for VAT and not charging VAT there is no harm adding 20% onto your sale price! That way, when you grow and have to start charging VAT you and your customers will have already got used to that level of pricing and your reclaimed vat on purchases will all be bunce.
    Posted: Jun 13, 2019 at 3:57 PM By: I_DO_MARKETING Member since: Oct 24, 2015
  9. spidersong

    spidersong UKBF Newcomer Free Member

    218 98
    O.K. First things first will the business be as a sole proprietor/partnership, or a limited company - VAT on education applies differently to the two. If a sole prop will you be providing all the training yourself or employing instructors/teachers as well.

    You say fully funded can't charge VAT as the money comes from Government: So who's actually contracting you the individuals or government directly and which part of government if so, or are you going to in essence be a subcontractor to schools etc. The exemption on government training schemes can be quite specific and doesn't necessarily apply to all training procured by government.

    Also will you be required to be Ofsted registered as that may give a blanket exemption no matter what sort of training you provide.

    And as a quick note you can only predict being over the threshold once you know whether you're making exempt or taxable supplies because the threshold only relates to taxable income, so with turnover of a million you might still find you haven't hit the threshold.
    Posted: Jun 13, 2019 at 5:03 PM By: spidersong Member since: Aug 20, 2008
  10. Scalloway

    Scalloway UKBF Legend Free Member

    14,778 3,142
    Posted: Jun 13, 2019 at 6:10 PM By: Scalloway Member since: Jun 6, 2010
  11. paulears

    paulears UKBF Big Shot Full Member

    3,786 935
    I think the difference between 'real' qualifications that sit at a point on the qualification framework, and 'training' for specific industries that don't have a validated qualification need to be considered.

    If you wish to offer training that offers a known standard of education, with a branded approved body to maintain standards, the OFSTED and qualified teachers assessors and verifiers are critical. These courses, because of their status, are the ones that cause VAT status queries.

    If your course is about guitar setup, or safe use of a ladder to stock shelves, or how to fix Windows issues, then it's a service and you get a 'stifficate' at the end of the day, that says XYZ Training certify that ............ has successfully completed the G102 training course on .............. and has demonstrated competency in A....... B.......... and C............

    They paid, turned up and didn't walk out, so they're trained to your standard and are thoroughly decent people.

    You'll be charging VAT and not getting government funding. If the course gets funding, it has to be validated - National Standards set and delivery and results examined, assessed, internally verified and external scrutinised too.
    Posted: Jun 13, 2019 at 6:59 PM By: paulears Member since: Jan 7, 2015
  12. lesvatadvice

    lesvatadvice UKBF Regular Free Member

    726 109
    Spidersong is right. In relation to the education exemption the status of the provider is a factor. Part of your discussion with your Accountant or other specialist is which is most suitable.
    Some education services are exempt when provided by a non-profit, which is not necessarily a charity, but may be a CIC, for example. Such supplies made by an 'ordinary' company are taxable.
    Do get this in place as early as you can.
    Posted: Jun 14, 2019 at 9:59 AM By: lesvatadvice Member since: Jul 7, 2011
  13. Carlene Cromedy

    Carlene Cromedy UKBF Newcomer Free Member

    3 0
    You will not charge until you get register yourself. after register, all your VAT tax depends on your services and business!
    Posted: Jun 14, 2019 at 6:47 PM By: Carlene Cromedy Member since: May 3, 2019