Tiny business - is it worth registering for VAT?

[AmToZa]

Hello,
I've done as much reading as I can but I'm still a bit stuck. I make silver jewellery, I have a tiny business (at the moment) but with it being silver supplies are very expensive. I have been looking into registering for VAT so that I can reclaim the VAT on my supplies, especially as I have a couple of big purchases I would like to make this year. So I've got a couple of questions;

1) is it worth registering and will they accept the registration? Would I have to be on the flat rate scheme which then makes it worthless as all my purchases are under £2000.
2) When selling in the market would I need to provide my customers with anything?
3) I don't have a business bank account, I just use a personal account I had for keeping the finances separate. Would this be acceptable?

I am not concerned about the paperwork side of things or charging VAT on my pieces.

I'd appreciate any help with this as I seem to be going round in circles.

Thank you

 

[Ian J]

What turnover are you forecasting?

 

[AmToZa]

Under £10k. Would it even be accepted?

 

[Walkol]

It would be accepted. However I am assuming that most of your sales are to the public? Therefore, unless you decrease your margin your prices would need to increase to cover the VAT element.

In (very) general terms - unless you are selling to VAT registered people/companies, do not register for VAT until you must.

 

[AmToZa]

I think I would probably be claiming more back than I would be paying in at the moment so even if I decreased my margins to absorb the VAT I'd probably still be better off. Yes my sales are to the public - handmade and bespoke jewellery, split between online and at various shows/markets. I don't particularly compete with anyone for most of my stuff as if someone falls in love that's that.

 

[Walkol]

Current....

Sale £100
Cost £50 (inc VAT)
Profit £50

VAT Reg

Sale £83.33 (+£16.67 VAT)
Cost £41.67 (+£8.33 VAT)
Profit £41.66

You've lost £8.34 in profit - ie 1/6th of your margin will now get paid to the tax man. Unless you increase your prices to account for this you will be worse off. And if that's the case why not just increase your price, not register for VAT and pocket the extra profit.

 

[k100danny]

you have absolutely no need to register for vat and will certainly be worse off.

also the £2000 doesn't mean if you buy stock over 2k you can claim the vat back, it is for specific things. retailers are nerly always better off waiting until vat registration is required before registering and after that a very large number are best on the flat rate scheme where you will be able to claim hardly any vat back unless under certain circumstances.

 

[CloudAccountantcouk]

If you're selling to the public you're better off charging your highest price and having no vat.

If you VAT register you'll have to give a bit to the VATman even with the benefits of the Flat rate Scheme.

Dealing with the public they won't be happy if you try and add VAT to your highest price.

 

[Jervi sand]

I think it is important to register for VAT, to stay safe from legal complications.

 

[Hash and Bash]

I think it is important to register for VAT, to stay safe from legal complications.

What utter drivel!

 

[john1989]

I think it is important to register for VAT, to stay safe from legal complications.

Registering for VAT voluntarily increases compliance. If there's no benefit of registering, why would you complicate issues?

 

[Ian J]

I think it is important to register for VAT, to stay safe from legal complications.

Will it help to ward off constipation too?