Sole Trader - VAT reg? brain boggled

[YorkshireYoda]

I keep going around in circles trying to workout the best route and my mind is spinning a little now. The context is my wife (who is currently PAYE) is setting up her own independent community nurse practitioner service. So private nursing services paid by the customer and also (hopefully) developing NHS referred services following CQC registration. Our thought process was for her to just start up as a sole trader. But we're weighing the pro/cons to voluntary VAT registration, because whilst she wouldn't be anywhere near the threshold for the forseable, the services she would be selling would be mostly VAT free as health services, therefore my thinking is that there wouldn't be a prohibitive VAT bill and she would benefit from being able to claim the VAT back for the goods, materials and equipment she needs to buy for the business (car, fuel etc too?). So a positive balance in her favour? Have we misunderstood? Apologies if this is a very noob question, but we've both only ever been fully employed PAYE. Never dabbled in this before.

 

[japancool]

Will the majority of your customers be VAT registered?

 

[Newchodge]

I keep going around in circles trying to workout the best route and my mind is spinning a little now. The context is my wife (who is currently PAYE) is setting up her own independent community nurse practitioner service. So private nursing services paid by the customer and also (hopefully) developing NHS referred services following CQC registration. Our thought process was for her to just start up as a sole trader. But we're weighing the pro/cons to voluntary VAT registration, because whilst she wouldn't be anywhere near the threshold for the forseable, the services she would be selling would be mostly VAT free as health services, therefore my thinking is that there wouldn't be a prohibitive VAT bill and she would benefit from being able to claim the VAT back for the goods, materials and equipment she needs to buy for the business (car, fuel etc too?). So a positive balance in her favour? Have we misunderstood? Apologies if this is a very noob question, but we've both only ever been fully employed PAYE. Never dabbled in this before.

A sole trader can be VAT registered. VAT can only be claimed back for purchases related to VAT-rated provisions. So if her services are VAT free she will be unable to reclaim much.

 

[YorkshireYoda]

A sole trader can be VAT registered. VAT can only be claimed back for purchases related to VAT-rated provisions. So if her services are VAT free she will be unable to reclaim much.

So had I misunderstood then? She will be selling VAT free medical/health services to predominantly non-VAT registered customers. But for the things she needs to buy for the business, such as phone, laptop, equipment etc and for the business expenses such as the car, fuel to travel to patients homes, insurance, internet etc, can't she still claim the VAT back for those, even though the end service is VAT free?

 

[DWS]

Are the supplies she will be making exempt or zero rated? Or a mixture of both which will complicate matters even more

 

[YorkshireYoda]

Are the supplies she will be making exempt or zero rated? Or a mixture of both which will complicate matters even more

I believe health/medical services are vat exempt?

 

[DWS]

Then she will be unable to claim any input VAT regarding exempt supplies