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britishwill

  • Posts: 536
I'm going into the VAT Flat Rate Scheme
« on: February 09, 2015, 09:25:18 pm »
Hi everyone

After a lot of calculations and working out I have come to the conclusion that I have to go VAT or I will not be able get bigger and ultimately earn more money. I have worked out if I go on the flat rate scheme and give every client a small raise, (not 11% as I already have really well priced work and feel this would make some clients leave.) I will be approx £5k a year worse off not including any larger purchases over 2k which I understand you can claim the VAT back.

Is there any advice any of you can give that have been there that would help with any potential pitfalls or tips that could help me.

I would really appreciate your comments

duncan h

  • Posts: 1875
Re: I'm going into the VAT Flat Rate Scheme
« Reply #1 on: February 09, 2015, 09:27:52 pm »
Stay as you are. Your making enough money  ;D

Tom-01

  • Posts: 1348
Re: I'm going into the VAT Flat Rate Scheme
« Reply #2 on: February 09, 2015, 10:02:56 pm »
Hi everyone

After a lot of calculations and working out I have come to the conclusion that I have to go VAT or I will not be able get bigger and ultimately earn more money. I have worked out if I go on the flat rate scheme and give every client a small raise, (not 11% as I already have really well priced work and feel this would make some clients leave.) I will be approx £5k a year worse off not including any larger purchases over 2k which I understand you can claim the VAT back.

Is there any advice any of you can give that have been there that would help with any potential pitfalls or tips that could help me.

I would really appreciate your comments

Hi Will

I'm in the same boat as you right now. It's been a tricky one because its been on my mind a lot as to which way to go.

Like yourself the majority of my work is priced quite high so its difficult to put the prices up. Also it would have to go up more than 11%. A £30 job plus 11% is £33.30 But then when you take the flat rate VAT off at 11% the £30 job becomes £29.64 - not as big a loss granted, but its still putting the price up and making less! And bear in mind that after one year the flat rate goes up to 12%. So any price increases I make will be minimum 15%.

I spent a lot of time chatting to my accountant about it all. One thing I looked at was to 'split' my business. Domestic exterior cleaning and a company for specialist cleaning - pressure cleaning and gutter cleaning. But then when you look at it all in detail there's so much going against you that its not worth the agg. Plus for us the way its going the domestic side of things will hit the threshold this year anyway.

I have actually gone over the threshold by quite a lot now, which is a good thing. A few months ago I started putting plans together to grow the business quite quickly, so from March it shouldn't be such a worry. Also we do a bit of commercial which you can charge 20% VAT so you can make up a bit from there.

At first I was quite worried about it, trying to get round it etc. But then I looked at it from a different view. If I've got a business turning over more than £100k with just one van and no direct employees thats something to be proud of. So I just need to keep on doing what I'm doing. Also I look at the VAT side now as just tax that needs to be paid. I save 20% a month of turnover (money actually come into the bank, not what aworka says we have done) so never have to worry about finding the money. So all VAT will be paid as will corporation tax.

If you don't want to stand still and keep making sure you're 'just under' the threshold I think the best strategy is to go and get more work in, as much as you can.

Thanks
Tom

Tom-01

  • Posts: 1348
Re: I'm going into the VAT Flat Rate Scheme
« Reply #3 on: February 09, 2015, 10:08:38 pm »
And yes you can claim the VAT back on purchases over £2k - and that includes it being at least £2k WITH the VAT. i.e. £1800 +VAT = £2,160 so you can claim the VAT back.


chris turner

  • Posts: 1492
Re: I'm going into the VAT Flat Rate Scheme
« Reply #4 on: February 09, 2015, 10:19:49 pm »
Hi everyone

After a lot of calculations and working out I have come to the conclusion that I have to go VAT or I will not be able get bigger and ultimately earn more money. I have worked out if I go on the flat rate scheme and give every client a small raise, (not 11% as I already have really well priced work and feel this would make some clients leave.) I will be approx £5k a year worse off not including any larger purchases over 2k which I understand you can claim the VAT back.

Is there any advice any of you can give that have been there that would help with any potential pitfalls or tips that could help me.

I would really appreciate your comments

Hi Will

I'm in the same boat as you right now. It's been a tricky one because its been on my mind a lot as to which way to go.

Like yourself the majority of my work is priced quite high so its difficult to put the prices up. Also it would have to go up more than 11%. A £30 job plus 11% is £33.30 But then when you take the flat rate VAT off at 11% the £30 job becomes £29.64 - not as big a loss granted, but its still putting the price up and making less! And bare in mind that after one year the flat rate goes up to 12%. So any price increases I make will be minimum 15%.

I spent a lot of time chatting to my accountant about it all. One thing I looked at was to 'split' my business. Domestic exterior cleaning and a company for specialist cleaning - pressure cleaning and gutter cleaning. But then when you look at it all in detail there's so much going against you that its not worth the agg. Plus for us the way its going the domestic side of things will hit the threshold this year anyway.

I have actually gone over the threshold by quite a lot now, which is a good thing. A few months ago I started putting plans together to grow the business quite quickly, so from March it shouldn't be such a worry. Also we do a bit of commercial which you can charge 20% VAT so you can make up a bit from there.

At first I was quite worried about it, trying to get round it etc. But then I looked at it from a different view. If I've got a business turning over more than £100k with just one van and no direct employees thats something to be proud of. So I just need to keep on doing what I'm doing. Also I look at the VAT side now as just tax that needs to be paid. I save 20% a month of turnover (money actually come into the bank, not what aworka says we have done) so never have to worry about finding the money. So all VAT will be paid as will corporation tax.

If you don't want to stand still and keep making sure you're 'just under' the threshold I think the best strategy is to go and get more work in, as much as you can.

Thanks
Tom

Tom how many 'non direct' employees do you have? Are he/she/they self-employed?
Your obviously doing very well for yourself especially with just one van on the road. Just curious on what terms you employ your staff. Iv considered employing someone a few times but in the end always decide against it.
I can decide whether to stick or twist....

Tom-01

  • Posts: 1348
Re: I'm going into the VAT Flat Rate Scheme
« Reply #5 on: February 09, 2015, 10:51:00 pm »


Tom how many 'non direct' employees do you have? Are he/she/they self-employed?
Your obviously doing very well for yourself especially with just one van on the road. Just curious on what terms you employ your staff. Iv considered employing someone a few times but in the end always decide against it.
I can decide whether to stick or twist....

[/quote]

Hi Chris

I have one guy who is the most regular and he is self employed. I have a few people who I can get in as and when I need to for larger jobs.

I'm not a fan of having to employ.. I may need to one day, but I'm hoping I won't have to.

I bought some work last year which has helped and also managed to put off buying a second van, I knew the costs would add up and wanted to save money and get ahead of myself to be able to invest in getting more work this year, but quicker than the time its taken to build what I have now - I didn't have any money 4 years ago so it was canvass canvass canvass, and a shed load of phone calls.

One little way I am going to try and put the prices up without actually 'putting them up' is sell garage door cleaning. Say what, £3.50 for a single garage door every 8 weeks? Most garage doors are minging. After the first clean with virosol they'll be dead easy, less than a minute. 'Mrs customer you pay £4 every 2 weeks to get your bins cleaned, to have a large part of the front of your house cleaned works out at an investment of just £1.75 a month'.

Even do the first clean for free (I know you love doing things for free Chris!) ;) you can show them how good it looks so they should go for it every time.

Also push for a lot more GFS cleans and pressure washing. If you're brave enough you can really charge good money for that work.

:)

Tom-01

  • Posts: 1348
Re: I'm going into the VAT Flat Rate Scheme
« Reply #6 on: February 09, 2015, 10:51:58 pm »

[/quote]

Tom how many 'non direct' employees do you have? Are he/she/they self-employed?
Your obviously doing very well for yourself especially with just one van on the road. Just curious on what terms you employ your staff. Iv considered employing someone a few times but in the end always decide against it.
I can decide whether to stick or twist....

[/quote]

My brother is one of those :)

PoleKing

  • Posts: 8974
Re: I'm going into the VAT Flat Rate Scheme
« Reply #7 on: February 09, 2015, 11:08:00 pm »


Tom how many 'non direct' employees do you have? Are he/she/they self-employed?
Your obviously doing very well for yourself especially with just one van on the road. Just curious on what terms you employ your staff. Iv considered employing someone a few times but in the end always decide against it.
I can decide whether to stick or twist....

[/quote]

My brothersister is one of those :)
[/quote]

nice
www.LanesWindowCleaning.com

It's just the internet. Try not to worry.

PoleKing

  • Posts: 8974
Re: I'm going into the VAT Flat Rate Scheme
« Reply #8 on: February 09, 2015, 11:09:40 pm »


Tom how many 'non direct' employees do you have? Are he/she/they self-employed?
Your obviously doing very well for yourself especially with just one van on the road. Just curious on what terms you employ your staff. Iv considered employing someone a few times but in the end always decide against it.
I can decide whether to stick or twist....


Hi Chris

I have one guy who is the most regular and he is self employed. I have a few people who I can get in as and when I need to for larger jobs.

I'm not a fan of having to employ.. I may need to one day, but I'm hoping I won't have to.

I bought some work last year which has helped and also managed to put off buying a second van, I knew the costs would add up and wanted to save money and get ahead of myself to be able to invest in getting more work this year, but quicker than the time its taken to build what I have now - I didn't have any money 4 years ago so it was canvass canvass canvass, and a shed load of phone calls.

One little way I am going to try and put the prices up without actually 'putting them up' is sell garage door cleaning. Say what, £3.50 for a single garage door every 8 weeks? Most garage doors are minging. After the first clean with virosol they'll be dead easy, less than a minute. 'Mrs customer you pay £4 every 2 weeks to get your bins cleaned, to have a large part of the front of your house cleaned works out at an investment of just £1.75 a month'.

Even do the first clean for free (I know you love doing things for free Chris!) ;) you can show them how good it looks so they should go for it every time.

Also push for a lot more GFS cleans and pressure washing. If you're brave enough you can really charge good money for that work.

:)
[/quote]

Be better off doing half the door while they're watching. (after asking, obviously)
Or show before/after pics on your phone. (this is what i do now)
Once its had its first clean in 4 decades, it won't actually need doing for ages.
www.LanesWindowCleaning.com

It's just the internet. Try not to worry.

Tom-01

  • Posts: 1348
Re: I'm going into the VAT Flat Rate Scheme
« Reply #9 on: February 09, 2015, 11:17:25 pm »


Tom how many 'non direct' employees do you have? Are he/she/they self-employed?
Your obviously doing very well for yourself especially with just one van on the road. Just curious on what terms you employ your staff. Iv considered employing someone a few times but in the end always decide against it.
I can decide whether to stick or twist....


Hi Chris

I have one guy who is the most regular and he is self employed. I have a few people who I can get in as and when I need to for larger jobs.

I'm not a fan of having to employ.. I may need to one day, but I'm hoping I won't have to.

I bought some work last year which has helped and also managed to put off buying a second van, I knew the costs would add up and wanted to save money and get ahead of myself to be able to invest in getting more work this year, but quicker than the time its taken to build what I have now - I didn't have any money 4 years ago so it was canvass canvass canvass, and a shed load of phone calls.

One little way I am going to try and put the prices up without actually 'putting them up' is sell garage door cleaning. Say what, £3.50 for a single garage door every 8 weeks? Most garage doors are minging. After the first clean with virosol they'll be dead easy, less than a minute. 'Mrs customer you pay £4 every 2 weeks to get your bins cleaned, to have a large part of the front of your house cleaned works out at an investment of just £1.75 a month'.

Even do the first clean for free (I know you love doing things for free Chris!) ;) you can show them how good it looks so they should go for it every time.

Also push for a lot more GFS cleans and pressure washing. If you're brave enough you can really charge good money for that work.

:)

Be better off doing half the door while they're watching. (after asking, obviously)
Or show before/after pics on your phone. (this is what i do now)
Once its had its first clean in 4 decades, it won't actually need doing for ages.
[/quote]

Yes, but you don't tell them that do you?! :)

SeanK

Re: I'm going into the VAT Flat Rate Scheme
« Reply #10 on: February 10, 2015, 08:13:27 am »
Hi everyone

After a lot of calculations and working out I have come to the conclusion that I have to go VAT or I will not be able get bigger and ultimately earn more money. I have worked out if I go on the flat rate scheme and give every client a small raise, (not 11% as I already have really well priced work and feel this would make some clients leave.) I will be approx £5k a year worse off not including any larger purchases over 2k which I understand you can claim the VAT back.

Is there any advice any of you can give that have been there that would help with any potential pitfalls or tips that could help me.

I would really appreciate your comments

Hi Will

I'm in the same boat as you right now. It's been a tricky one because its been on my mind a lot as to which way to go.

Like yourself the majority of my work is priced quite high so its difficult to put the prices up. Also it would have to go up more than 11%. A £30 job plus 11% is £33.30 But then when you take the flat rate VAT off at 11% the £30 job becomes £29.64 - not as big a loss granted, but its still putting the price up and making less! And bare in mind that after one year the flat rate goes up to 12%. So any price increases I make will be minimum 15%.

I spent a lot of time chatting to my accountant about it all. One thing I looked at was to 'split' my business. Domestic exterior cleaning and a company for specialist cleaning - pressure cleaning and gutter cleaning. But then when you look at it all in detail there's so much going against you that its not worth the agg. Plus for us the way its going the domestic side of things will hit the threshold this year anyway.

I have actually gone over the threshold by quite a lot now, which is a good thing. A few months ago I started putting plans together to grow the business quite quickly, so from March it shouldn't be such a worry. Also we do a bit of commercial which you can charge 20% VAT so you can make up a bit from there.

At first I was quite worried about it, trying to get round it etc. But then I looked at it from a different view. If I've got a business turning over more than £100k with just one van and no direct employees thats something to be proud of. So I just need to keep on doing what I'm doing. Also I look at the VAT side now as just tax that needs to be paid. I save 20% a month of turnover (money actually come into the bank, not what aworka says we have done) so never have to worry about finding the money. So all VAT will be paid as will corporation tax.

If you don't want to stand still and keep making sure you're 'just under' the threshold I think the best strategy is to go and get more work in, as much as you can.

Thanks
Tom

Tom how many 'non direct' employees do you have? Are he/she/they self-employed?
Your obviously doing very well for yourself especially with just one van on the road. Just curious on what terms you employ your staff. Iv considered employing someone a few times but in the end always decide against it.
I can decide whether to stick or twist....


Chris the first thing you need to learn is how to smell the bull poop on here, as for employing there is no easy way you just go
for it if you have the work or cash flow to keep you going until you have enough work.
Yes you can sub work out to other self employed window cleaners but that would mean pricing the work as to cover the cost
of the hired window cleaner and have enough left to make it worth while for yourself.
In other words you would just be renting work out to other cleaners and I don't need to point out how that one could go.

8weekly

Re: I'm going into the VAT Flat Rate Scheme
« Reply #11 on: February 10, 2015, 08:22:35 am »
Hi everyone

After a lot of calculations and working out I have come to the conclusion that I have to go VAT or I will not be able get bigger and ultimately earn more money. I have worked out if I go on the flat rate scheme and give every client a small raise, (not 11% as I already have really well priced work and feel this would make some clients leave.) I will be approx £5k a year worse off not including any larger purchases over 2k which I understand you can claim the VAT back.

Is there any advice any of you can give that have been there that would help with any potential pitfalls or tips that could help me.

I would really appreciate your comments

Hi Will

I'm in the same boat as you right now. It's been a tricky one because its been on my mind a lot as to which way to go.

Like yourself the majority of my work is priced quite high so its difficult to put the prices up. Also it would have to go up more than 11%. A £30 job plus 11% is £33.30 But then when you take the flat rate VAT off at 11% the £30 job becomes £29.64 - not as big a loss granted, but its still putting the price up and making less! And bare in mind that after one year the flat rate goes up to 12%. So any price increases I make will be minimum 15%.

I spent a lot of time chatting to my accountant about it all. One thing I looked at was to 'split' my business. Domestic exterior cleaning and a company for specialist cleaning - pressure cleaning and gutter cleaning. But then when you look at it all in detail there's so much going against you that its not worth the agg. Plus for us the way its going the domestic side of things will hit the threshold this year anyway.

I have actually gone over the threshold by quite a lot now, which is a good thing. A few months ago I started putting plans together to grow the business quite quickly, so from March it shouldn't be such a worry. Also we do a bit of commercial which you can charge 20% VAT so you can make up a bit from there.

At first I was quite worried about it, trying to get round it etc. But then I looked at it from a different view. If I've got a business turning over more than £100k with just one van and no direct employees thats something to be proud of. So I just need to keep on doing what I'm doing. Also I look at the VAT side now as just tax that needs to be paid. I save 20% a month of turnover (money actually come into the bank, not what aworka says we have done) so never have to worry about finding the money. So all VAT will be paid as will corporation tax.

If you don't want to stand still and keep making sure you're 'just under' the threshold I think the best strategy is to go and get more work in, as much as you can.

Thanks
Tom

Tom how many 'non direct' employees do you have? Are he/she/they self-employed?
Your obviously doing very well for yourself especially with just one van on the road. Just curious on what terms you employ your staff. Iv considered employing someone a few times but in the end always decide against it.
I can decide whether to stick or twist....


Chris the first thing you need to learn is how to smell the bull poop on here, as for employing there is no easy way you just go
for it if you have the work or cash flow to keep you going until you have enough work.
Yes you can sub work out to other self employed window cleaners but that would mean pricing the work as to cover the cost
of the hired window cleaner and have enough left to make it worth while for yourself.
In other words you would just be renting work out to other cleaners and I don't need to point out how that one could go.
In steps jelly boots.  ;D

One think people may be interested in is that if you go limited the clock gets reset to zero. So if you are at £75k in a rolling 10 months and about to go over the VAT level, if you go limited you get reset to zero giving you another tempo months or whatever to rack up VAT level. Chances are you are already limited so it might not help, but I was a bit late in going that way.

Tom-01

  • Posts: 1348
Re: I'm going into the VAT Flat Rate Scheme
« Reply #12 on: February 10, 2015, 04:49:56 pm »
Hi everyone

After a lot of calculations and working out I have come to the conclusion that I have to go VAT or I will not be able get bigger and ultimately earn more money. I have worked out if I go on the flat rate scheme and give every client a small raise, (not 11% as I already have really well priced work and feel this would make some clients leave.) I will be approx £5k a year worse off not including any larger purchases over 2k which I understand you can claim the VAT back.

Is there any advice any of you can give that have been there that would help with any potential pitfalls or tips that could help me.

I would really appreciate your comments

Hi Will

I'm in the same boat as you right now. It's been a tricky one because its been on my mind a lot as to which way to go.

Like yourself the majority of my work is priced quite high so its difficult to put the prices up. Also it would have to go up more than 11%. A £30 job plus 11% is £33.30 But then when you take the flat rate VAT off at 11% the £30 job becomes £29.64 - not as big a loss granted, but its still putting the price up and making less! And bare in mind that after one year the flat rate goes up to 12%. So any price increases I make will be minimum 15%.

I spent a lot of time chatting to my accountant about it all. One thing I looked at was to 'split' my business. Domestic exterior cleaning and a company for specialist cleaning - pressure cleaning and gutter cleaning. But then when you look at it all in detail there's so much going against you that its not worth the agg. Plus for us the way its going the domestic side of things will hit the threshold this year anyway.

I have actually gone over the threshold by quite a lot now, which is a good thing. A few months ago I started putting plans together to grow the business quite quickly, so from March it shouldn't be such a worry. Also we do a bit of commercial which you can charge 20% VAT so you can make up a bit from there.

At first I was quite worried about it, trying to get round it etc. But then I looked at it from a different view. If I've got a business turning over more than £100k with just one van and no direct employees thats something to be proud of. So I just need to keep on doing what I'm doing. Also I look at the VAT side now as just tax that needs to be paid. I save 20% a month of turnover (money actually come into the bank, not what aworka says we have done) so never have to worry about finding the money. So all VAT will be paid as will corporation tax.

If you don't want to stand still and keep making sure you're 'just under' the threshold I think the best strategy is to go and get more work in, as much as you can.

Thanks
Tom

Tom how many 'non direct' employees do you have? Are he/she/they self-employed?
Your obviously doing very well for yourself especially with just one van on the road. Just curious on what terms you employ your staff. Iv considered employing someone a few times but in the end always decide against it.
I can decide whether to stick or twist....


Chris the first thing you need to learn is how to smell the bull poop on here, as for employing there is no easy way you just go
for it if you have the work or cash flow to keep you going until you have enough work.
Yes you can sub work out to other self employed window cleaners but that would mean pricing the work as to cover the cost
of the hired window cleaner and have enough left to make it worth while for yourself.
In other words you would just be renting work out to other cleaners and I don't need to point out how that one could go.

Please, where is the 'bull poop'?

Tom-01

  • Posts: 1348
Re: I'm going into the VAT Flat Rate Scheme
« Reply #13 on: February 10, 2015, 05:27:14 pm »
Hi everyone

After a lot of calculations and working out I have come to the conclusion that I have to go VAT or I will not be able get bigger and ultimately earn more money. I have worked out if I go on the flat rate scheme and give every client a small raise, (not 11% as I already have really well priced work and feel this would make some clients leave.) I will be approx £5k a year worse off not including any larger purchases over 2k which I understand you can claim the VAT back.

Is there any advice any of you can give that have been there that would help with any potential pitfalls or tips that could help me.

I would really appreciate your comments

Hi Will

I'm in the same boat as you right now. It's been a tricky one because its been on my mind a lot as to which way to go.

Like yourself the majority of my work is priced quite high so its difficult to put the prices up. Also it would have to go up more than 11%. A £30 job plus 11% is £33.30 But then when you take the flat rate VAT off at 11% the £30 job becomes £29.64 - not as big a loss granted, but its still putting the price up and making less! And bare in mind that after one year the flat rate goes up to 12%. So any price increases I make will be minimum 15%.

I spent a lot of time chatting to my accountant about it all. One thing I looked at was to 'split' my business. Domestic exterior cleaning and a company for specialist cleaning - pressure cleaning and gutter cleaning. But then when you look at it all in detail there's so much going against you that its not worth the agg. Plus for us the way its going the domestic side of things will hit the threshold this year anyway.

I have actually gone over the threshold by quite a lot now, which is a good thing. A few months ago I started putting plans together to grow the business quite quickly, so from March it shouldn't be such a worry. Also we do a bit of commercial which you can charge 20% VAT so you can make up a bit from there.

At first I was quite worried about it, trying to get round it etc. But then I looked at it from a different view. If I've got a business turning over more than £100k with just one van and no direct employees thats something to be proud of. So I just need to keep on doing what I'm doing. Also I look at the VAT side now as just tax that needs to be paid. I save 20% a month of turnover (money actually come into the bank, not what aworka says we have done) so never have to worry about finding the money. So all VAT will be paid as will corporation tax.

If you don't want to stand still and keep making sure you're 'just under' the threshold I think the best strategy is to go and get more work in, as much as you can.

Thanks
Tom

Tom how many 'non direct' employees do you have? Are he/she/they self-employed?
Your obviously doing very well for yourself especially with just one van on the road. Just curious on what terms you employ your staff. Iv considered employing someone a few times but in the end always decide against it.
I can decide whether to stick or twist....


Chris the first thing you need to learn is how to smell the bull poop on here, as for employing there is no easy way you just go
for it if you have the work or cash flow to keep you going until you have enough work.
Yes you can sub work out to other self employed window cleaners but that would mean pricing the work as to cover the cost
of the hired window cleaner and have enough left to make it worth while for yourself.
In other words you would just be renting work out to other cleaners and I don't need to point out how that one could go.
In steps jelly boots;D

One think people may be interested in is that if you go limited the clock gets reset to zero. So if you are at £75k in a rolling 10 months and about to go over the VAT level, if you go limited you get reset to zero giving you another tempo months or whatever to rack up VAT level. Chances are you are already limited so it might not help, but I was a bit late in going that way.

Too true there mate. Its always him sticking his stupid oar in as well.

Yeah I'm already limited mate (unless I'm lying of course). There's a few things I'm doing which help the business.

Tom-01

  • Posts: 1348
Re: I'm going into the VAT Flat Rate Scheme
« Reply #14 on: February 10, 2015, 05:29:06 pm »
Hi everyone

After a lot of calculations and working out I have come to the conclusion that I have to go VAT or I will not be able get bigger and ultimately earn more money. I have worked out if I go on the flat rate scheme and give every client a small raise, (not 11% as I already have really well priced work and feel this would make some clients leave.) I will be approx £5k a year worse off not including any larger purchases over 2k which I understand you can claim the VAT back.

Is there any advice any of you can give that have been there that would help with any potential pitfalls or tips that could help me.

I would really appreciate your comments

Hi Will

I'm in the same boat as you right now. It's been a tricky one because its been on my mind a lot as to which way to go.

Like yourself the majority of my work is priced quite high so its difficult to put the prices up. Also it would have to go up more than 11%. A £30 job plus 11% is £33.30 But then when you take the flat rate VAT off at 11% the £30 job becomes £29.64 - not as big a loss granted, but its still putting the price up and making less! And bare in mind that after one year the flat rate goes up to 12%. So any price increases I make will be minimum 15%.

I spent a lot of time chatting to my accountant about it all. One thing I looked at was to 'split' my business. Domestic exterior cleaning and a company for specialist cleaning - pressure cleaning and gutter cleaning. But then when you look at it all in detail there's so much going against you that its not worth the agg. Plus for us the way its going the domestic side of things will hit the threshold this year anyway.

I have actually gone over the threshold by quite a lot now, which is a good thing. A few months ago I started putting plans together to grow the business quite quickly, so from March it shouldn't be such a worry. Also we do a bit of commercial which you can charge 20% VAT so you can make up a bit from there.

At first I was quite worried about it, trying to get round it etc. But then I looked at it from a different view. If I've got a business turning over more than £100k with just one van and no direct employees thats something to be proud of. So I just need to keep on doing what I'm doing. Also I look at the VAT side now as just tax that needs to be paid. I save 20% a month of turnover (money actually come into the bank, not what aworka says we have done) so never have to worry about finding the money. So all VAT will be paid as will corporation tax.

If you don't want to stand still and keep making sure you're 'just under' the threshold I think the best strategy is to go and get more work in, as much as you can.

Thanks
Tom

Tom how many 'non direct' employees do you have? Are he/she/they self-employed?
Your obviously doing very well for yourself especially with just one van on the road. Just curious on what terms you employ your staff. Iv considered employing someone a few times but in the end always decide against it.
I can decide whether to stick or twist....


Chris the first thing you need to learn is how to smell the bull poop on here, as for employing there is no easy way you just go
for it if you have the work or cash flow to keep you going until you have enough work.
Yes you can sub work out to other self employed window cleaners but that would mean pricing the work as to cover the cost
of the hired window cleaner and have enough left to make it worth while for yourself.
In other words you would just be renting work out to other cleaners and I don't need to point out how that one could go.


You haven't got a clue SeanK. Or perhaps that should be YawnK.

chris turner

  • Posts: 1492
Re: I'm going into the VAT Flat Rate Scheme
« Reply #15 on: February 10, 2015, 05:48:42 pm »
I'm satisfied Tom is legit. He seems a very intelligent and honest guy, and knowing the area he works in  I can imagine he gets paid well. Alot of mansions in his neck of the woods....

Clever Forum Name

  • Posts: 5942
Re: I'm going into the VAT Flat Rate Scheme
« Reply #16 on: February 10, 2015, 06:04:25 pm »
Tom do you use vision?  ;D

Tom-01

  • Posts: 1348
Re: I'm going into the VAT Flat Rate Scheme
« Reply #17 on: February 10, 2015, 06:08:54 pm »
I'm satisfied Tom is legit. He seems a very intelligent and honest guy, and knowing the area he works in  I can imagine he gets paid well. Alot of mansions in his neck of the woods....

Thanks Chris. I posted on this thread to try to help BritishWill because as I said, I'm in the same boat - and was more than happy to answer your questions to try to help as well.

Yes there's lots of mansions and we do a few of them, but to be honest there's some we have done in the past want the moon on a stick and forever complaining etc so I don't hanker after them - ones we do now are bonus money. I find the ones just under the 'mansion' bracket to be the best customers - they tend to own their own businesses or are high up in companies with huge budgets and understand that things cost money, want the job done and pay with no fuss, and aren't up their own backsides. And we charge £25 day rate so we're not cheap.............. ;)

Tom-01

  • Posts: 1348
Re: I'm going into the VAT Flat Rate Scheme
« Reply #18 on: February 10, 2015, 06:09:44 pm »
Tom do you use vision?  ;D

Only 'business vision' mate ;)

Ha! I sound like my old sales boss!! :)

Clever Forum Name

  • Posts: 5942
Re: I'm going into the VAT Flat Rate Scheme
« Reply #19 on: February 10, 2015, 06:40:17 pm »
Tom do you use vision?  ;D

Only 'business vision' mate ;)

Ha! I sound like my old sales boss!! :)

 ;D ;D