VAT Registration

[Tashman]

Hi
I have been a web designer since 2006 and now i have started selling other web services like domain names etc. All the other web hosting businesses charge VAT, but they don't display the VAT until the checkout stage (ok they put a little asterisk at the bottom explaining that VAT is excluded) so it makes their prices look cheaper then mine. Should I voluntarily register for VAT? I pay out over £500 a year for web space of which about £85 is VAT.
Best regards
Alan

 

[Scalloway]

Are your customers businesses or private individuals?

 

[Tashman]

Mostly business customers and a few personal.

Best regards
Alan

 

[Scalloway]

If you are selling to businesses they will very likely be VAT registered, which means that you will be be more expensive, as they will be able to reclaim the VAT charged to them by other providers. In this situation you are probably better to register for VAT, as it will put you on a par with your competitors.

 

[Tashman]

Many thanks for your time.

Best regards

Alan

 

[Tashman]

Hi again,

So am I right in saying when i register for VAT and charge my customers for a product that I have paid VAT on, I can then charge them VAT. Do i still charge VAT for web design as i will be offering both services. Example, if i design a site for say £300 and charge them £50 for hosting, do i charge the full £350 with VAT or £300 without and £50 with VAT.

Best Regards
Alan

 

[faradaykeynes]

Generally once you are vat registered, you need to charge vat on all services provided by your business

 

[TheCyclingProgrammer]

As above, you usually charge VAT on everything but it can depend on what the service is and where your client is based. Certain services can be zero rated, exempt or outside the scope of UK VAT.

You would charge VAT at the standard rate on your web design services unless your customer is a business and outside of the UK.

You would charge VAT on your entire service including any materials or expenses incurred if you are recharging them.

There may be times, if you're buying something on your customers behalf, that you can treat it as a disbursement. Web hosting MIGHT be something that would fall under that category but you should check the HMRC rules as it could also form part of your service, depending on how it's supplied and in whose name.

 

[k100danny]

as you state you supply a lot of businesses that won't mind being charged vat as long as your vat inclusive price is around the same as others offering the same service it may be in your interest to look at the flat rate scheme. This could work in your favour providing you don't buy a lot of things with vat on and being a designer from what i hear it's usually in your interest with most to go for the flat rate scheme.

 

[Tashman]

Thanks to all you guys.

 

[john1989]

If you only have recover VAT of around £85, and you are able to charge VAT to your customer in addition to your existing prices, then it might be worth registering and adopting the Flat Rate Scheme.