Transaction values to reduce VAT threshold

[LizReynolds72]

Good afternoon,

I am wondering what ways can reduce the amount of sales to limit going over the vat threshold.

I know sales are sales, but are there any ways or things that can bring down the value of sales. I know refunds do, but what about other things/transactions?

I'm not referring to huge sums of money, but anything that can keep you under.

Petty cash, credit notes, invoice due being delayed?,

any tips or advice would be helpful, also available via DM if needed.
thank you.
Liz

 

[Newchodge]

Good afternoon,

I am wondering what ways can reduce the amount of sales to limit going over the vat threshold.

I know sales are sales, but are there any ways or things that can bring down the value of sales. I know refunds do, but what about other things/transactions?

I'm not referring to huge sums of money, but anything that can keep you under.

Petty cash, credit notes, invoice due being delayed?,

any tips or advice would be helpful, also available via DM if needed.
thank you.
Liz

Reduce prices. Not a lot else can work.

 

[japancool]

Reduce prices. Not a lot else can work.

Or stop selling once you near the threshold.

 

[NM Benson]

From memory, I stand corrected if wrong, but if it is a one-off or temp increase above the VAT limit you can apply for some kind of, not exemption as such, but a temp status?

 

[DontAsk]

Anything you do is delaying the inevitable. Cross the threshold and concentrate on growing your business to compensate.

 

[BobzYourUncle]

Raise your prices to include the VAT. Pay it makes your life easier instead of artificially suppressing your sales.

 

[WaveJumper]

Completely the wrong frame of mind in my book instead of spending your time worrying about keeping under the threshold put the effort into growing the business

 

[Trapbarn]

It depends ln the circumstances.

If say, you are in retirement and using the business to produce a profitable income stream, the optimum way is to increase prices. This improves the margin whilst lowering the sales volume. It means you make more profit per sale. You do less work whilst increasing your profitability.

But it is a vey fine balancing act and massively influenced by the credibility of the sales pitch you create to sell your product or service.

Start by discontinuing the low margin products that add lots to revenue but not much to profit.

Never forget "revenue is vanity, profit is sanity"

 

[DontAsk]

It depends ln the circumstances.

Indeed

If say, you are in retirement and using the business to produce a profitable income stream, the optimum way is to increase prices. This improves the margin whilst lowering the sales volume.

It depends on how price sensitive the sales are. If they are very sensitive then you could destroy the profitability. Alternatively you could breach the VAT threshold even sooner.

It means you make more profit per sale. You do less work whilst increasing your profitability.

See above.

Never forget "revenue is vanity, profit is sanity"

Have you tried selling your ideas to Tesco, et al?

 

[14Steve14]

We went through this a few years back. We spoke to two acconuants who gave us two tottally different bits of advoce. Our accountant said register for VAT, and concentrate on increasing tuenover.

The other suggested that as I was a sole trader that I should split the business and start a LTD company which would reduce the turnover as it would be split between two. I thought about this but decided that it would cause to many problems to keep two business totally seperate when there was alot of cross over between the two.

It was finally down to how we thought HMRC would look at things. We just kep t going as we were and increased turnover and believ eit or not we got more business because we were VAT registered even though we operate in the hobby sector.

 

[japancool]

Lesson for anyone starting a B2C business.

Price everything as if you were VAT registered from day one. Work out your pricing model on that basis. Then enjoy the extra margin while it lasts.

 

[Mr D]

Good afternoon,

I am wondering what ways can reduce the amount of sales to limit going over the vat threshold.

I know sales are sales, but are there any ways or things that can bring down the value of sales. I know refunds do, but what about other things/transactions?

I'm not referring to huge sums of money, but anything that can keep you under.

Petty cash, credit notes, invoice due being delayed?,

any tips or advice would be helpful, also available via DM if needed.
thank you.
Liz

You could cease trading for a period of weeks or months. Disadvantage is you can lose a lot of customers.

What do your competitors do?