has VAT registration cost you customers?

[welchyboy]

Hi all

Im now at the point where vat registration is inevitable within the next few weeks, and I'm concerned about loosing domestic work, I currently undertake around 40% comm and 60% domestic, i would like to be vat registered as it would be cheaper for my business and currently some of my commercial customers moan because I'm not currently vat

Has VAT affected your domestic sales to any extent , I am keen to expand my business and eventually leave most domestic work behind but still rely on it somewhat, but I feel it would be stunting my business growth by trying to stay under the threshold and not getting registered

Any input thanks

 

[batty]

I cannot see how any full time sparks cannot be VAT registered unless they don't supply materials. I have been VAT registered since 2003 and would say it has not affected my business. I do more domestic than commercial but a fair bit is subcontract. But as the builders are VAT registered I have to be also as they wouldn't b able to get the VAT back. As for you getting money back that's very unlikely.

 

[Steve3948]

Been VAT registered since I started, so would not know if you gain or lose customers.

However on new Zero rated work if you are not VAT registered then you would lose the work, as you pay VAT on your materials.

When I first started 50% of my work was Zero rated.

 

[welchyboy]

As for you getting money back that's very unlikely.

Dont understand that bit batty?

 

[batty]

You will get the money back on the materials you purchase also VAT back on fuel ETC. But you will charge 20% on top for you labour and any profit you make on your materials will have a 20% mark up on VAT. It is very unlikely you will get money back from HMRC unless you buy a new vehicle. Basically you are a tax collector for HMRC.

 

[paul b b]

I don't get the fact that company's only wanting you if your vat reg. They still pay the same, if they pay you 100 if your not vat reg or 120 if you are then they still pay you 100 speno what's the big deal?

 

[batty]

If you provide materials they will not be able to claim the VAT back if you are not registered so its dead money. It all depends who you work for really.

 

[paul b b]

That's a good point batty

 

[welchyboy]

What I meant by lower business costs was I have bought a new van in 2011 paid around

 

[Sidewinder]

Are you self employed or ltd. co.?

It makes a difference wrt vat and many other things.

Tbh, I would not know about loosing customers as from day 1 I was employed by a ltd. co. & always have been since & intend to stay that way, also have always been employed by vat reg. firms, & am at the moment, though, I am the only share hold & director, I do have 2 employees in the co.

This probably does not help tbh!

 

[batty]

Vans are irrelevant as it comes of your tax anyway. The bonus is if you are registered you get it back on the quarter rather than at the end of the year. Same with tools as said you are just a tax collector if you are registered.

 

[ProDave]

I cannot see how any full time sparks cannot be VAT registered unless they don't supply materials. I have been VAT registered since 2003 and would say it has not affected my business. I do more domestic than commercial but a fair bit is subcontract. But as the builders are VAT registered I have to be also as they wouldn't b able to get the VAT back. As for you getting money back that's very unlikely.

Well I am a self employed sparks and I am NOT vat registered and have no intention of ever being VAT registered. Why would I want to be? Just yet more paperwork, and I hate paoerwork.

My turnover is well below the threshold for compulsory VAT registration.

Only ONCE has VAT registration (or lack of) lost me a job, and that was a new build where the customer wanted me to supply the materials, and of course not being VAT registered I had no option but to charge VAT on materials. Normally I get round this by getting the customer to supply materials on a new build and they can claim the VAT back at the end of the build, but this guy didn't want to do that.

 

[Evans Electric]

Although , going back 18 years, my turnover didn't reach the VAT threshold , customers were complaining that I wasn't VAT registered so they couldn't claim VAT back from my invoices.

These were mostly printing companies and one particular builder.

If your turnover is below the threashold and you do Domestic work , VAT is the last thing you need .

If Commercial / Industrial then it doesn't matter .

 

[batty]

Very true Deke it depends on your customers. As I do both domestic and commercial and provide materials I need to be registered as A my turnover is well over the threshold and B commercial customers need it so they can claim the VAT back. If you just do domestic you could get the customers to provide materials if you don't mind the headache. But personally I think its just easier to be registered. You don't want to go over the threshold because you will end up paying HMRC out of your own pocket.

 

[Steve3948]

If you supply materials and labour and do 5 days a week it's not hard to exceed the threshold, and it's then a requirement to register for VAT, not sure what happens if you don't but would imagine when they catch up with you they will want VAT on all your turnover back to when you exceeded the threshold, you will in turn then try and recover the VAT not charged from your customers, and the VAT office will not give a hoot if you succeed or not, as it will have been your error.

 

[batty]

Your domestic customers certainly won't pay it the commercial would if they can claim it back just be careful it could cost you dearly.

 

[Evans Electric]

VAT threshold is

 

[baldelectrician]

My turnover has been less than half the VAT threshold and makes no sense for me to register for VAT as over 95% of my business is domestic

I know of a guy that has set up a ltd company that is vat reg and has a sole trader that isn't so he puts his domestic through the sole trader and the rest through his ltd. It makes things more complicated for him but apparently he saves money, but has to have 2 sets of accounts at the wholesalers and keep everything seperate

 

[steptoe]

I'll bet the tax man loves him.!

they apparently take a very dim view of such actions.

 

[sellers]

Also you are supposed to go vat registered if you exceed the limit in any quarter! So 19,250 in a quarter and you should be registered!