Installs

[Tom]

Just looking for a little infomation regarding installs.


After you have arranged everything for the install, do you then require full payment or just a deposit???

Also, is there any "special" paper work I would need to have or get drawn up???

[Danieleastwood.com]

Tom, I get the impression this may be your first install. Just wanted to double check that last scentance about "special paperwork".

The amount of paperwork I remember having to be witness to when I worked for Enhance Audio in Bristol was immense. Guarantees for this and that, Health and safety schedules, and also independant safety checks!!!!

You really need to do your homework before you attempt installs! Trust me, Chasing money and fighting claims isn't any fun.

Good luck with it! I hope it goes well.

[Tom]

Tom, I get the impression this may be your first install. Just wanted to double check that last scentance about "special paperwork".

The amount of paperwork I remember having to be witness to when I worked for Enhance Audio in Bristol was immense. Guarantees for this and that, Health and safety schedules, and also independant safety checks!!!!

You really need to do your homework before you attempt installs! Trust me, Chasing money and fighting claims isn't any fun.

Good luck with it! I hope it goes well.

Thanks for the advice.

I have a few ideas locked away in my head for 2009, and this being one of them. Hopefully some real money makers but we will see what happens really. :)

Not to sure on what paperwork would be needed, hence the question. :)

Just after more infomation on the matter. :)

[One Vision]

Hya Tom, I have never done this kind of install, however if a large install the general method would be to get a % of the quoted fee if your a small company and don't have credit accounts at the places were to buy the gear needed.
The % should reflect at least the costs for the raw materials then you can actually do the work.

[A1DL]

Hi Tom

One main point for you to look at if venturing into this territory is VAT registration. Even the smallest bar/club will be VAT registered and will expect to receive a VAT invoice for the installation (equipment, labour, support, etc).

You won't get any install work if you are not VAT registered, as you will always have to be 15% more expensive on equipment supplied than a VAT registered installer BEFORE you make any profit. Also, you are unlikely to be granted trade facilities with any of the major distributors if you are not VAT registered.

Depending on the scale of the installation, you may receive some monies at various stages prior to completion. You haven't said what you are talking about installing - sound, light, AV or indeed the full package. However, at a large club refit (taking months rather than a couple of weeks), it is typical for the installation company to be paid on issue of an interim certificate, once signed off by the architect at several stages throughout the job. For a small install, (five figures as opposed to six or seven) - let's say four stacks of Res4 over F218s with amps & processing, or a dozen movers, some LED stuff and a desk, this would typically invoiced once the job was complete.

Hope this helps.

Tony

[Tom]

Thanks for the infomation. :)


Was looking at sound and light installs for shops, churchs, schools, stuf li,e that really. Would like to some club work but would need to do more research in to that.

Working about the VAT issue would not be a problem. The problem would be trying to get trade accounts (thats if I need them???) but I know this cannot be done as I am not VAT registered and won't be either, unless I get more work that is.

[A1DL]

Working about the VAT issue would not be a problem. The problem would be trying to get trade accounts (thats if I need them???) but I know this cannot be done as I am not VAT registered and won't be either, unless I get more work that is.

Tom - you can voluntarily register for VAT if you don't achieve the mandatory registration threshold.

If you are entering the install market and will be supplying equipment you are installing, trade accounts are vital. Without them, how do you intend making a profit on stock purchased for resale? With most distributors, your first few transactions will be payable upfront, after which you will be given credit facilities. Most offer a worthwhile settlement discount too.

[Tom]

Tom - you can voluntarily register for VAT if you don't achieve the mandatory registration threshold.

If you are entering the install market and will be supplying equipment you are installing, trade accounts are vital. Without them, how do you intend making a profit on stock purchased for resale? With most distributors, your first few transactions will be payable upfront, after which you will be given credit facilities. Most offer a worthwhile settlement discount too.

Wow. Thanks again for the more infomation. Now for VAT related question. From what I understand, you have to pay more as being VAT registered but how much more are we talking. If it helps me get more work then I'm all up for it.

Also does it mean I have to add anything after my name??? If so, then best to change it all now before I get my next set of buisness cards made up.

[[email protected]]

Wow. Thanks again for the more infomation. Now for VAT related question. From what I understand, you have to pay more as being VAT registered but how much more are we talking. If it helps me get more work then I'm all up for it.

Also does it mean I have to add anything after my name??? If so, then best to change it all now before I get my next set of buisness cards made up.

Hi Tom

You don't have to pay any more being voltuntary VAT registered, infact your business expenses become 15% cheaper. ie if you pay £100 for something before becoming VAT registered, it costs you £100. After you become VAT registered, the actual cost of the item becomes £100 including VAT (£86.95 + VAT).

It does mean that your customers will have to pay VAT on top of your fees, so if you charge a client £100 for something at the moment, after you become VAT registered you have a choice whether to eat the VAT in your fee or charge the fee at £100 + VAT (totalling £115).

On the standard cash accounting scheme you save up the VAT you collect from your customers and then usually every 3 months, total up what VAT you have paid to your suppliers, deduct it off what you have collected and either pay or claim back the difference from/to HMRC.

As most of your install work is going to be done to other businesses then paying VAT won't affect them, however, there is a small possibility that your private customers may not want to pay VAT on top of your disco fees.

Hope this helps.

[A1DL]

Now for VAT related question. From what I understand, you have to pay more as being VAT registered but how much more are we talking. If it helps me get more work then I'm all up for it.


Tom - let's use an example...

Take a Mac250 Krypton. List is £2,145.00 (ex vat) All manufacturers and distributors will quote ex vat prices.

Trade discount is (say) 25% ex settlement
So the cost of the Mac to the installer is £1,608.75 (ex vat)

If I buy said Mac, it will cost me £1,608.75.
If you buy it, it will cost you £1,850.06 (an extra 15%)

I can sell my Mac on an install for £1850+vat to a VAT registered club owner and I have made £242 profit.

If you sell yours for £1,850 - you've made nothing.
If you try to sell yours for £2,000 - you wont be in the marketplace.

[Tom]

Thanks for the infomation Alan.

I thought that being VAT, you would have to pay more.

Just got a feeling that people will start doing this, just to get a bit of money off. lol.

I believe that being VAT registered would help bring in work. Showing the client that I am not just Mr Bloggs of the street who owns runs a mobile disco.

I already save about 30% per gig to pay for tax as I don't know what the actual percentage is. Would the 30% stay the same or would I have to increase???

[Tom]

Tom - let's use an example...

Take a Mac250 Krypton. List is £2,145.00 (ex vat) All manufacturers and distributors will quote ex vat prices.

Trade discount is (say) 25% ex settlement
So the cost of the Mac to the installer is £1,608.75 (ex vat)

If I buy said Mac, it will cost me £1,608.75.
If you buy it, it will cost you £1,850.06 (an extra 15%)

I can sell my Mac on an install for £1850+vat to a VAT registered club owner and I have made £242 profit.

If you sell yours for £1,850 - you've made nothing.
If you try to sell yours for £2,000 - you wont be in the marketplace.

Again, thanks for the help. Really can't say thank you enough. lol.

[[email protected]]

Hi Tom

You are right, in my experience, customers will pay VAT on fees and they percieve to be getting a better product.

With regards to what you put away after each gig, it depends if you decide to eat the VAT in your fee or charge it + VAT, i used to charge + VAT on my fee and then transfer the VAT element into a separate savings account so i always new how much VAT in total i may have to pay over, and continued to transfer the 'tax & NI' percentage of the net fee into a different savings account.

I have also just remembered something else that can be a little earner on your 1st VAT return, you are allowed to claim back any VAT on any equipment that you have purchased since you became self employed, providing you still own it & have the reciept to prove it. So all the money that you have paid over the last XX years on equipment (not CD's or mp3s unfortunately) you can claim 17.5% or 15% back.

It worked for me for about 7 yrs, ( i have deregistered now), as the other business that i'm involved with is VAT registered, so if a client want's to pay VAT on the fee i just invoice through that company and not through my own self employed earnings.

Any other questions just ask.

Oh and just to cover my back, unfortunately i'm in no way an accountant, so anything said above plse double check :D :D :D :D

Cheers
Alan

[Tom]

If I can get this done before April then I would be abe to claim on my Mackies, X-moves and loads of other gear then???

I would find it a lot easier to charge the extra 15% (till january 2010) and just keep that back and put that away. The rest is mine then. Much easier that way.

[Solitaire Events Ltd]

I have also just remembered something else that can be a little earner on your 1st VAT return, you are allowed to claim back any VAT on any equipment that you have purchased since you became self employed


Unless this is different for an incorporated company, then it is 3 years of items that you still hold in stock.

Tony A1 will confirm this I'm sure.

[[email protected]]

Unless this is different for an incorporated company, then it is 3 years of items that you still hold in stock.

Tony A1 will confirm this I'm sure.


I have to confess it was 7/8 yrs ago when i 1st became VAT reg, so i can't be 100% sure if the rules haven't changed.

[Solitaire Events Ltd]

I have to confess it was 7/8 yrs ago when i 1st became VAT reg, so i can't be 100% sure if the rules haven't changed.

I became Vat registered a year ago, so know those are the rules for a Ltd company (unless they've changed again), but wasn't sure if it was different for a sole trader or partnership.

[A1DL]

Unless this is different for an incorporated company, then it is 3 years of items that you still hold in stock.

Tony A1 will confirm this I'm sure.

Exactly as Daz has said, section 11.2 (goods) and 11.3 (services) of the VAT guidelines.

[Tom]

Thanks for all the help guys. :).

EDIT: Worked it out. lol.

[Tom]

Ok need a bit of help.

I am the stage where I need put when would I like to be registered. Should I put the date when I first become a sole trader???

[A1DL]

Ok need a bit of help.

I am the stage where I need put when would I like to be registered. Should I put the date when I first become a sole trader???

No, Tom. the date must be a future date.

We registered 10 years ago, in fact the accountant did the registration process for us, however I vaguely recall the commencement date was set as the start of the next month. This allowed time for HMRC (or HMCE as they were back then) to issue the VAT Regd No., as this is required to issue a VAT invoice. Invoices issued from the commencement date are subject to VAT (at the applicable rate)

[Tom]

Thanks for that. This is why I asked.

This is what's on the form now. Just needed a second pair of eyes. :)



Registering earlier

If you wish to register from an earlier date, this can be backdated up to three years from the date of this submitted application, provided you were eligible to be VAT registered throughout that time.

You should be aware that you will have to account for VAT on all your taxable supplies made from that date.



Advanced notification

You may make an advance notification requesting to be registered up to three months in the future, we will not normally issue you with your VAT Registration Number or certificate until that date. At that date we may require you to confirm that you are still entitled to be registered; or that you did not become liable to register at an earlier date.

[Bouncy Dancefloor]

before you go rushing into VAT registration in pursuit of more profit

bare in mind that you will have to charge VAT on your normal disco bookings. So if you doing a disco for £140 to Joe Bloggs, you will then have to charge £161, companies get the VAT back so arent bothered, but average joe bloggs pays the extra money and never gets it back, this suddenly makes you a fair bit more expensive, (and you dont get the extra £21 either, you owe it to the VAT Man) you have to consider this before rushing up to get VAT registered. You want to do installs, but you havnt actually got the work yet. If you dont charge extra, you then have to swallow the VAT and you only earn £121 (before tax and NI)

Also the Install market is very competitive, very often places will obtain 3 like for like quotes and pick the one they want, its not as easy as it looks. Getting accounts with trade suppliers like Skytronic and CPC will help, but they dont sell every brand, but you wont get dealerships for people like Numark, Peavey etc and a pro installer will be able to quote in Peavey goods with Numark at the same prices that you will be quoting skytec and prosound...

[Pe7e]

I totally agree with the above post, you seem to be railroading yourself into VAT registration. Unless your turnover is above the £67,000 threshold, you have no legal requirement to register. Assuming you are currently working mostly for private individuals, (ie non VAT registered) the result of registration, would be a disaster for your profits.
If you think being registered will give you more credibility (and bookings) with private clients, you're mistaken, they don't care. And if you think they'll happily pay you an extra (unrecoverable £30) 15% on top of the bill, you are living in cloud cuckoo land. If your prices will stand a 15% loading, then put them up, and pocket the extra as profit.
Assuming you are charging fees in the region of £200 - £250 a gig, the reality of registering yourself for VAT, is that you will end up paying the taxman around £30 every time you go out to work. Plus, if you are late in paying your VAT liabilities, or telling them how much you owe them, you will face an additional fine, which, if you can't pay, will result in them sending in the bailiffs to recover. IMO joining this club unnessecerily, is utter madness.
At the very least, TAKE PROFESSIONAL ADVICE from your accountant before committing yourself. In the meantime read this Moneyweek.com (http://www.moneyweek.com/personal-finance/keep-under-the-vat-threshold-13658.aspx)
Anyway, good luck.

[A1DL]

Also the Install market is very competitive, very often places will obtain 3 like for like quotes and pick the one they want, its not as easy as it looks. Getting accounts with trade suppliers like Skytronic and CPC will help, but they dont sell every brand, but you wont get dealerships for people like Numark, Peavey etc and a pro installer will be able to quote in Peavey goods with Numark at the same prices that you will be quoting skytec and prosound...

Wrong Level. At how many installs do you see any of those four budget, firmly "mobile disco" brands? Very few, occasionally the odd Numark CD player at a tiny bar, perhaps.

Most installation companies will specify, source and install product. Larger clubs whom have a technical manager may be involved in the specification, however smaller venues, bar/restaurants, etc will normally leave that aspect to the companies tendering for the work.

An installer does not need "dealership" facilities as you put it, they need trade accounts at the likes of Leisuretec Distribution, Batmink, etc - these companies supply professional audio, lighting & AV kit on a business to business (trade) basis. If you're unfamiliar with the kit being installed these days, just flick through a recent copy of Night.

[beaumont118]

As it says is possible in the above MoneyWeek article, would it not be worth considering splitting the businesses into two separate ones, one being the mobile disco and the other being installs with only the install one being VAT registered, or is this only possible with two individuals as in the article?

[ppentertainments]

Tom, what sort of installs are you talking about ??
Are you talking about major installs at high class venues or your basic, more budget consious installs at smaller working mens clubs, pubs etc ??

The advice given seems to lend itself to the 'higher market' venues.

[A1DL]

Tom indicated earlier in the thread he would be targeting the Retail and Educational sectors, also houses of worship and possibly clubs.

[ppentertainments]

Tom indicated earlier in the thread he would be targeting the Retail and Educational sectors, also houses of worship and possibly clubs.

Sorry, missed that post.

[A1DL]

As it says is possible in the above MoneyWeek article, would it not be worth considering splitting the businesses into two separate ones, one being the mobile disco and the other being installs with only the install one being VAT registered, or is this only possible with two individuals as in the article?

I sugest anyone considering this takes professional advice.

Where HMRC identify a business has been artificially separated into smaller parts and this results in the avoidance of VAT, they have the power to direct that the persons running said activities be treated as a single taxable person and registered.

[rob1963]

I sugest anyone considering this takes professional advice.

Agreed.


Where HMRC identify a business has been artificially separated into smaller parts and this results in the avoidance of VAT, they have the power to direct that the persons running said activities be treated as a single taxable person and registered.

I'd have thought it would be far simpler to have two separate businesses: the installs one which would clearly need to be VAT registered & the mobile discos one which probably would not.

[A1DL]

I'd have thought it would be far simpler to have two separate businesses: the installs one which would clearly need to be VAT registered & the mobile discos one which probably would not.


Rob, your definition of "need" in this context may be different to HMRC's difinition.

If the installation business was a VAT registered limited company and the mobile disco business was a non-VAT registered sole trader operation, this would most likely be acceptable to HMRC, as each is its own legal entity.

However, if Tom is a sole trader, HMRC would view all his activities that generate sales as a single entity.

[rob1963]

Rob, your definition of "need" in this context may be different to HMRC's difinition.

If the installation business was a VAT registered limited company and the mobile disco business was a non-VAT registered sole trader operation, this would most likely be acceptable to HMRC, as each is its own legal entity.

However, if Tom is a sole trader, HMRC would view all his activities that generate sales as a single entity.

A1DL,

I accept what you say.

My comment that the installs business would clearly NEED to be VAT registered was based on posts made earlier in this thread, including one from yourself stating that Tom wouldn't get any install work if he wasn't VAT registered.

In other words, my use of the word NEED was relating to a practical point of view...rather than any rules or regulations laid down by HMRC.

[Tom]

Tom, what sort of installs are you talking about ??
Are you talking about major installs at high class venues or your basic, more budget consious installs at smaller working mens clubs, pubs etc ??

The advice given seems to lend itself to the 'higher market' venues.


Tom indicated earlier in the thread he would be targeting the Retail and Educational sectors, also houses of worship and possibly clubs.

Bingo. Where I live there a few pub/club type places that I have been to when out clubbing with my other half. The sound in most of the venues was really bad so I feel I have something to work towards.


Also, I admit I don't have the work in to do installs, or even just supply the equipment, but isn't this like how DJ starts out. ??? No one knows who they are untill they advertise there services and then people will know about them.


Rob, your definition of "need" in this context may be different to HMRC's difinition.

If the installation business was a VAT registered limited company and the mobile disco business was a non-VAT registered sole trader operation, this would most likely be acceptable to HMRC, as each is its own legal entity.

However, if Tom is a sole trader, HMRC would view all his activities that generate sales as a single entity.

I am a sole trader. :). Once I have had a chat with someone (family members who works for HMRC:o), we shall see what happens. Metting up with them tonight infact.

[Bouncy Dancefloor]

Wrong Level. At how many installs do you see any of those four budget, firmly "mobile disco" brands? Very few, occasionally the odd Numark CD player at a tiny bar, perhaps.

Most installation companies will specify, source and install product. Larger clubs whom have a technical manager may be involved in the specification, however smaller venues, bar/restaurants, etc will normally leave that aspect to the companies tendering for the work.

An installer does not need "dealership" facilities as you put it, they need trade accounts at the likes of Leisuretec Distribution, Batmink, etc - these companies supply professional audio, lighting & AV kit on a business to business (trade) basis. If you're unfamiliar with the kit being installed these days, just flick through a recent copy of Night.

For someone who has never installed anything in his life, id be concerned if he was going for venues beyond the type i was describing. The brands i mentioned were merely examples. If you were installing Martin Audio, you will still get undercut by someone with a Genuine Martin Audio account over buying from a wholesaler. I think you are getting carried away (and pretty elitist) by even referring to night magazine on this thread, the OP clearly lacks experience and id be very surprised if he made it into Night Magazine!

Also for the Education sector, i mainly see Phonic and Behringer gear, strictly disco grade equipment! But again cheaper if you have a main dealer account!

[Tom]

For someone who has never installed anything in his life, id be concerned if he was going for venues beyond the type i was describing. The brands i mentioned were merely examples. If you were installing Martin Audio, you will still get undercut by someone with a Genuine Martin Audio account over buying from a wholesaler. I think you are getting carried away (and pretty elitist) by even referring to night magazine on this thread, the OP clearly lacks experience and id be very surprised if he made it into Night Magazine!

Also for the Education sector, i mainly see Phonic and Behringer gear, strictly disco grade equipment! But again cheaper if you have a main dealer account!



Also, I admit I don't have the work in to do installs, or even just supply the equipment, but isn't this like how DJ starts out. ??? No one knows who they are untill they advertise there services and then people will know about them.


So how did you get in to doing kids discos then??? I'm sure you were like most people, with an idea in your head which you wanted to act upon and you did with your kids discos. I wish to expand my area of work, whats wrong with that?

I not aiming my work at the large clubs and have no intention. I dont want the stress of all that. I am more after small stuff like school, houses of worship. Work on small stuff and build my self up, like a dj. You do small cheap discos, then work your way up the ladder and charge larger amounts as you gain experaince.

I know I did mention clubs but these are not the normal style clubs where hundreds or maby thousands of people go to. The ones I am on about could hold 200 people max. More like a pub/club hybrid.

[Bouncy Dancefloor]

So how did you get in to doing kids discos then??? I'm sure you were like most people, with an idea in your head which you wanted to act upon and you did with your kids discos. I wish to expand my area of work, whats wrong with that?

i went along and helped out a fellow DJ to learn the ropes

perhaps you should try this on installs instead of learning as you go? You can improvise on some jobs, but mounting speakers on wall and touching electrics is not one of them and you could be putting peoples lives at risk

[Tom]

i went along and helped out a fellow DJ to learn the ropes

perhaps you should try this on installs instead of learning as you go? You can improvise on some jobs, but mounting speakers on wall and touching electrics is not one of them and you could be putting peoples lives at risk

Ok, I agree with the tagging along with install guys. There is a local company who do install work so will have a word with them.

I aim training to be an electrician so I have one up on that.

To be honest, I was thinking about getting a sparky in to do the actuall eletrical side of things till I am fully qualified. I know quite a few qualified sparkys who could do with the extra work so I am trying cover all corners here.