sole trader small van courier

[pgk]

Hi I'm looking at becoming a small van courier as a sole trader, my working background is in welding/engineering where I also drove a 7.5 tonne wagon and a 3.5 tonne van as part of my job so I have some experience in delivering to customers , anyway I was made redundant and I'm looking to buy a small Berlingo type van and I know I will need to get VAT registered but the money I am going to use to buy the van and the components needed to be a courier driver is from my redundancy payment I received can I take that money back out of the profits made as a sole trader?

 

[Waddy]

Hi I'm looking at becoming a small van courier as a sole trader, my working background is in welding/engineering where I also drove a 7.5 tonne wagon and a 3.5 tonne van as part of my job so I have some experience in delivering to customers , anyway I was made redundant and I'm looking to buy a small Berlingo type van and I know I will need to get VAT registered but the money I am going to use to buy the van and the components needed to be a courier driver is from my redundancy payment I received can I take that money back out of the profits made as a sole trader?

As a sole trader legally you and the business are a single entity, there is nowhere to take money from.

Why would you need to be VAT registered? You only need to register for VAT when your rolling 12 month turnover exceeds £85,000. You can register under the threshold if it's necessary to gain clients, but otherwise it's just going to cost you money.

 

[pgk]

As a sole trader legally you and the business are a single entity, there is nowhere to take money from.

Why would you need to be VAT registered? You only need to register for VAT when your rolling 12 month turnover exceeds £85,000. You can register under the threshold if it's necessary to gain clients, but otherwise it's just going to cost you money.

Waddy:
the app I'm going to use to get work from says I need to be VAT registered plus I have seen other couriers on forums and social media that say it is best to be Vat registered

 

[Waddy]

Waddy:
the app I'm going to use to get work from says I need to be VAT registered plus I have seen other couriers on forums and social media that say it is best to be Vat registered

Admittedly, couriering is not an area I know much about, so if it's necessary to be VAT registered from the outset then at least your startup costs will be lower.

 

[Scalloway]

If you are going to work for businesses that are VAT registered then being VAT registered yourself means that you can reclaim the VAT on your costs, such as the van and fuel. Your customers will reclaim the VAT you charge them. It does mean more admin as you will have to make returns online every 3 months.

I recommend seeing an accountant to help you set up.

 

[DoolallyTap]

Why not just register a Ltd company now, off the shelf for about £15, keep your own records for 12 months before approaching an accountant.

 

[JEREMY HAWKE]

Everybody in this game is vat registered even one of my subbie that runs himself ragged for a few months then disappears abroad as soon as he has 4 grand
This is a very top heavy expense business where all your cost are subject to vat and it is always a benefit to be registered.
Running as sole owner driver is best done as a sole trader and very few owner drivers (normally the badly advised ones) form a company.

I'm not a big fan of running off Apps It is far better to gain contacts with your local courier companies and form trading relationships with them
Again the owner drivers working with us direct also work direct with other courier companies and they do a lot better than those depending solely on the Courier Exchange but I am talking about rural Devon and Cornwall
Make sure you do plenty of research

 

[Paul Kelly ICHYB]

at least your startup costs will be lower.

How?

you can reclaim the VAT on your costs,

You don't - you offset VAT on your sales with VAT paid on supplies! Using the 'reclaim' statement makes people think they will get all of their VAT back - it's misleading!

make returns online every 3 months.

Remember MTD (Making Tax Digital).

 

[Waddy]

Everybody in this game is vat registered even one of my subbie that runs himself ragged for a few months then disappears abroad as soon as he has 4 grand
This is a very top heavy expense business where all your cost are subject to vat and it is always a benefit to be registered.
Running as sole owner driver is best done as a sole trader and very few owner drivers (normally the badly advised ones) form a company.

I'm not a big fan of running off Apps It is far better to gain contacts with your local courier companies and form trading relationships with them
Again the owner drivers working with us direct also work direct with other courier companies and they do a lot better than those depending solely on the Courier Exchange but I am talking about rural Devon and Cornwall
Make sure you do plenty of research

Surely the whole goal is to take more money than you spend, so unless you have huge upfront costs or are planning to run at a loss to build up business, there seems no point in being VAT registered for financial reasons.

If it's required to attract jobs and clients, then fair enough, I don't know enough about the industry, but unless you like giving money to the government for no reason then it doesn't seem like a wise financial decision.

 

[Waddy]

How?

Because you won't have to pay VAT on them (or can offset the VAT against future sales).

 

[Scalloway]

You don't - you offset VAT on your sales with VAT paid on supplies! Using the 'reclaim' statement makes people think they will get all of their VAT back - it's misleading!

Why do businesses always show their prices net of VAT?

In the OP's case they will charge the same rate plus VAT that they would charge if they weren't VAT registered. Reclaiming VAT on costs will increase profit.

 

[DoolallyTap]

Why do businesses always show their prices net of VAT?

In the OP's case they will charge the same rate plus VAT that they would charge if they weren't VAT registered. Reclaiming VAT on costs will increase profit.

B2B is always net of VAT because both parties will pay and reclaim.

 

[DoolallyTap]

PGK says - my working background is in welding/engineering, driving may be a skill, welding and engineering are certainly skills, setting up as a mobile welder would probably be far more profitable than being a van driver.

 

[estwig]

I'm on a flat rate scheme thing for VAT, I charge 20% of course, I only hand over 14%, I cant claim anything for VAT purchases I make.

This might suit you, it works well for me because I don't buy anything.

 

[Newchodge]

B2B is always net of VAT because both parties will pay and reclaim.

Only if they are both VAT registered.

 

[JEREMY HAWKE]

Only if they are both VAT registered.

The OP will be running for courier companies only if he is running off the platform I am thinking it is ,so all parties will be vat registered

 

[Duke Fame]

Waddy:
the app I'm going to use to get work from says I need to be VAT registered plus I have seen other couriers on forums and social media that say it is best to be Vat registered

I

Hi I'm looking at becoming a small van courier as a sole trader, my working background is in welding/engineering where I also drove a 7.5 tonne wagon and a 3.5 tonne van as part of my job so I have some experience in delivering to customers , anyway I was made redundant and I'm looking to buy a small Berlingo type van and I know I will need to get VAT registered but the money I am going to use to buy the van and the components needed to be a courier driver is from my redundancy payment I received can I take that money back out of the profits made as a sole trader?

You may want to consider a limited company here, then the money you put in can be taken back tax free.

 

[DWS]

I

You may want to consider a limited company here, then the money you put in can be taken back tax free.

As it would as a sole-trader!

 

[Duke Fame]

As it would as a sole-trader!

Fair point, I was going to add a few more details but things got in the way.

 

[JEREMY HAWKE]

I

You may want to consider a limited company here, then the money you put in can be taken back tax free.

No!

The op will have a very low turn over as I can see his business proposal using my psychic powers (maybe I have just seen it all before)

I can give you his rough Estimated T/O
It will be in the region of 35k per annum ......That's turn over not profit. That for those of inherited difficulty or plain ignorance this means all the money coming in before any goes out! ( We should not have to explain this )