any ideas on is there a point to do voluntary VAT registration for a start up bookkeeping practice? I do not think I will be over the treshold for years, I am not even sure if I am going to get any significant profit in the first year...I am just not sure about client expectations like VAT invoice and I don,t really know if I only can claim back anything on capital/business expenditure if I am VAT registered? I am trying to market to sole traders and small businesses so charging VAT if they cannot claim it back maybe doesn,t help either...
I wouldn't register if I were you as it means that your fee's will need to be 17.5% higher than your competitions to make the same money. Well, either than or you make 17.5% less than your competition.
hope that your having a good weekend,
kind regards,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
I agree with Shaun, unless your clients are mainly vat registered then I probably wouldn't bother with registering. However it does make me wonder how many businesses that need bookkeeping assistance are not vat registered. I can see the small trader with receipts in a shoe box who want their final accounts and tax return doing may not be vat registered. Are these your prime target? From my own practice, the 'bookkeeping only' type clients are all vat registered (in fact the main reason they want their bookkeeping doing is so we can do their vat!).
I would certainly wait though until you have afew clients to see how it all pans out.
So long as your clients are VAT registered it can be beneficial to be registered - if you have minimal expenses then the flat rate scheme would enable you to make some extra money.
Hi, I'm not VAT reg and my clients who are (not many) are not bothered that I am not. They are only interested in getting their books done and the ones that are VAT reg their VAT returns done in time. The issue about me not being VAT reg has never came up. They are more bothered about the service you supply. Anyway thats what I find, and my are quite small Sole traders.
I thought the flat rate was pretty poor for our profession, I'll need to check it out agian and see if it would be beneficial to change.
For our profession it is 13% - but for those who have only just registered for VAT there is a 1% discount.
Thus for the first year, for every £175 you collect, you would only have to pay over £141 - if your turnover as a sole trader working from home with minimal expenses was say £35,000 then that allows for £1,190 to be retained. In year two that figure would reduce to £778.75.
For some there may not be any benefit, but when I was working from home with minimal expenses I was better off by just over £500 by registering for VAT and the flat rate scheme.
it would not be of benefit to me unfortunately. I think it is crazily high when you consider that the owner managed computer subcontractors who have only the odd train expense to put in can claim this. I have fairly large expenses, and thousands to pay for softwware etc so I think it has been pitched at an unreasonably high level. Fortunately I can do proper vat returns!
it would not be of benefit to me unfortunately. I think it is crazily high when you consider that the owner managed computer subcontractors who have only the odd train expense to put in can claim this. I have fairly large expenses, and thousands to pay for softwware etc so I think it has been pitched at an unreasonably high level. Fortunately I can do proper vat returns!
That is the only downside to the flat rate scheme - some of my clients switched and it has been hard work getting it through to the client that they still need to keep appropriate records. Unfortunately, so much has been said about the FRS making life easier for the business owner that they forget that the records kept are not just about VAT!
