Originally Posted by
scott23
But the main reason is that I have some business clients whom rent P.A. from me and they would obv make a saving and I would look more pro.
How will it save them money? For example you charge them £500 for a PA hire, and being VAT registered you are obliged to add £100 VAT which you put into your account for 3 months before handing it over to the VAT man. Your clients can then claim back the £100 in 3 months time (no gain) If you're not registered you charge £500, they pay it and that's the end of it, no vat to pay you and the money stays in their account and you don't have the hassle of the paperwork, VAT inspector visits, possible fines if you don't get your returns and payments sent in time, and the dubious pleasure of acting as a unpaid tax collector for HMRC
Cons: Well Paperwork every 3 months. Already dealt with
Have to charge VAT to everyone else.
This is the big one, being VAT registered won't make you look better to your clients who aren't, it will make you 20% MORE EXPENSIVE, if you think you can increase your prices by 20% without loosing customers, DO IT and increase YOUR profits, not George Osbourns
There is probably more and I have been advised from a few friends who have businesses that say the tax man takes a keen interest in everything you do when your reg for VAT and I shouldn't go near it.
The VAT inspectors will take extra interest in you if they think you are not following the rules, or your returns don't broadly follow your industries average returns, and rest assured these inspections can be a pain to say the least
Any thoughts? Anyone reg for VAT?
Unless your turnover is going to exceed £81,000, (registration is then mandatory) or the vast majority of your work is for corporates, and the VAT you can reclaim makes financial sense, take your friends advice, and run a mile