VAT registration

[punkie]

I've just got my new LTD registered. Have been with a brolly until now.
Here's the newbie question:
What are the actual advantages of getting VAT registered immediately, before I hit the treshold? If any?
Assuming I won't buy more than one crappy laptop and PDA this year...
Thanks

[DaveB]

I've just got my new LTD registered. Have been with a brolly until now.
Here's the newbie question:
What are the actual advantages of getting VAT registered immediately, before I hit the treshold? If any?
Assuming I won't buy more than one crappy laptop and PDA this year...
Thanks

Firstly VAT registration looks more professional as a company. Most larger clients will expect to be charged VAT.

Secondly if you register you can get on the Flat Rate Scheme. This means you effectively get to keep some of the VAT you charge your clients.

You invoice for £10,000

VAT on £10,000 = £1750

Invoice total = £11750

You pay the VAT man 12% of the gross = £1410

You get to keep the rest. £1750 - £1410 = £340 in your pocket.

The actual percentage varies according to how your company activities are classified. Anywhere from 10% to 14%, with a 1% discount in the first 12 months of trading. Talk to an accountant of have a read of this

[simondolan]

Firstly VAT registration looks more professional as a company. Most larger clients will expect to be charged VAT.

Secondly if you register you can get on the Flat Rate Scheme. This means you effectively get to keep some of the VAT you charge your clients.

You invoice for £10,000

VAT on £10,000 = £1750

Invoice total = £11750

You pay the VAT man 12% of the gross = £1410

You get to keep the rest. £1750 - £1410 = £340 in your pocket.

Yep - is well worth it - you also get a 1% discount on the VAT FRS for the first year, so you will save even more money. Check with your accountant (or Customs do a list too), about the rate that applies to your business. You may find it will be slightly more or less than the 12% depending on what sort of consulting you are doing.

[dmini]

VAT registration to getting a number took me exactly 3 weeks -VAT number got yesterday.
If you can get it done before you start trading its easier - as stated on other threads you will have to collect VAT on invoices from day of registration, but you are not supposed to include VAT on invoices, till you get a number & then send another invoice. Real pain!

[Darren@UptonAccountants]

Vat

3 weeks....how did you manage that?

New registrations seem to be taking up to 8 weeks these days, spoke to the local registration unit who are now advising up to 10 weeks....absolutely crazy!

[VectraMan]

You get to keep the rest. £1750 - £1410 = £340 in your pocket.

Assuming no expenses. I'd lose about £150 of that (out of £10K income) because of the VAT I wouldn't be able claim back, and that's with me being Mr commuter to keep the costs down. A few nights in hotels per week and I'd probably be worse off on the flat rate scheme.

[dmini]

3 weeks....how did you manage that?

New registrations seem to be taking up to 8 weeks these days, spoke to the local registration unit who are now advising up to 10 weeks....absolutely crazy!

Dunno
Got company registration details on 29th June, registered that day on the website for VAT, paperwork got sent back last Friday as incomplete, returned it, got letter giving VAT number in the post from them yesterday!
It said the certificate proper would follow shortly.
They were telling me 5-8 weeks, when I phoned up to do the flat rate stuff so I was rather happywhen it was less! Paperwork has come from HMCE Wolverhampton.

[punkie]

VAT registration to getting a number took me exactly 3 weeks -VAT number got yesterday.
If you can get it done before you start trading its easier - as stated on other threads you will have to collect VAT on invoices from day of registration, but you are not supposed to include VAT on invoices, till you get a number & then send another invoice. Real pain!

So would I invoice £1000 and no VAT on the first invoice, later send the same again with +£175 VAT??

Btw. if I buy goods for £1175 incl VAT, then become VAT registered, then sell the goods for £2000+350 VAT; do I need to pay £350 to Gordon, but can't claim the £175 back??

[decode]

If you don't have a VAT number yet simply put 'VAT number applied for' and charge vat on your invoice. Saves messing around later when you do get your vat number.