I would say no its not worth it, he is just thinking about claiming the VAT back on the van and purchases etc, what he doesn't realise it will cost him money each quarter to have his VAT done by you. If he decides to go VAT reg later say in 1 years time then he can always claim the VAT back then on the Van. Obviously in a years time he may be close to the VAT threshold anyway.
This is just my opinion, others on here may say different.
HTH
-- Edited by Amanda on Monday 29th of July 2013 09:53:51 PM
I have a new client that I have just acquired. It's a new business started last November. He has asked me if he can claim back VAT on his purchase invoices.
He's not yet VAT registered so I have told him no, not unless he registers for VAT.
Is it really worth it for him? He has earned £11k from November to April and has expenses somewhere in the region of £8.5k but that includes £2.5k for purchase of a new Van.
Should he wait until his earnings are higher? It's going to cost him if he want's VAT returns doing where as at the moment it's just a self assessment which I have just started to work on.
Thanks for the replies. I would say he should stick to where he is now. I think the majority of his clients are homeowners. He's an electrician so adding 20% on will probably put people off. It could be a while before he reaches the threshold.
