Are any other book-keepers here VAT registered? I understand that the turnover of most book-keepers will fall below the threshold, but has anyone registered for any other non-compulsory reason? I'mkeen to start my own bookkeeping business and want to be taken seriously from day one. I figure that being VAT registered will give me more credibility. The way I see it (rightly or wrongly) is that most of my future business clients will also be VAT registered. Even if I have to add output VAT to my hourly charge out rate e.g. £15 per hour plus £2.63 (gross rate of £17.63), most of my clients will be able to reclaim it on their VAT return and therefore won't be any worse off. It also means that I would be able to reclaim input VAT on some of my purchases which would help my cash flow. Am I barking up the wrong tree? I would appreciate sum help? Cheers.
I would never voluntarily register for VAT unless my t/o was above the threshold. Although you may be able to pass on the additional 17.5% to VAT registered clients, I would be concerned it would make my rates uncompetitive with non-registered clients e.g. charities, of which I have two as clients. Also complying with the additional reporting requirements (it's hassle enough doing VAT returns for clients let alone my own business) and ensuring I do not spend the additional revenue would put me off.
I think being VAT registered would really only make a difference if you were dealing with much larger (national) companies. One of my clients only started last year and sells a product to major sports stadiums all over the UK. He found being VAT registered and having the all important VAT number on his letterhead helped him get through the door. No solid proof of this of course, just what he's told me. I don't believe it would have any real advantages for a book-keeper though.
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