[Dry Clean]

So we would be forced to increase prices by 20% and see no increase in our profits, becoming unpaid tax collectors for HMRC.
It's likely the lower earners (sub 30k) would not be allowed to claim back vat on purchases.
We could get fined or imprisoned for failing to submit the vat return on time or by making an honest mistake on the return.
There would be an increase in accountant's fees to pay.
And there's a strong possibility that a good few customers will reduce the amounts of cleans per year, which will affect end of year profits.

Are there any positives to this?

Yes it will make you feel like your a real business man when posting all your vat receipts through the doors. lol.
plus MP's will have a few extra quid to waste.

[p1w1]

Full story here..https://www.pressreader.com/uk/the-daily-telegraph/20171104/281513636421195

Well thats going to have a big impact on the way we operate 

Why out of interest? it just something that would be passed on cost wise to the customer, why would that have a big impact on how you  operate ?

VAT isn't passed onto the customer it comes out of your pocket, example if a customer is happy to pay you £20 vat included
they would still be happy to pay £20 without vat.
In other words customers have no interest in how the money is divided up, taxes expenses and so on.

Of course they dont care, but if i'm charging £20 for a house i would then charge plus VAT if i have too, i'm already getting the price i want, my takings will still be the same as it was before VAT so it wont cost me anything.

How does it not cost you anything ? you will have just upped your prices increased your profits and will be no better off, if your happy enough with that then fair enough but don't be fooled into thinking its not you who's paying for it.

No all i will have done is increased my turnover not profit.

True. but you could have increased your profit ok fine the vat wasn't thete

If you charge someone say £10 that would have been the price that you are happy with based on what you want to earn. If the customer is just as happy to pay £12 after adding VAT, then you havent lost anything have you for all you know that customer may have been happy paying £15. Yes you could say i could of charged him £12 and had more profit but you didn't in the first place so what are you losing out on.
Dont get me wrong there are no positives to this at all and it would make things harder for us for sure with people wanting less frequencies etc and of course a forced price increase that has no benefit to the individual and something  nobody really wants to do.

[Dry Clean]

Full story here..https://www.pressreader.com/uk/the-daily-telegraph/20171104/281513636421195

Well thats going to have a big impact on the way we operate 

Why out of interest? it just something that would be passed on cost wise to the customer, why would that have a big impact on how you  operate ?

VAT isn't passed onto the customer it comes out of your pocket, example if a customer is happy to pay you £20 vat included
they would still be happy to pay £20 without vat.
In other words customers have no interest in how the money is divided up, taxes expenses and so on.

Of course they dont care, but if i'm charging £20 for a house i would then charge plus VAT if i have too, i'm already getting the price i want, my takings will still be the same as it was before VAT so it wont cost me anything.

How does it not cost you anything ? you will have just upped your prices increased your profits and will be no better off, if your happy enough with that then fair enough but don't be fooled into thinking its not you who's paying for it.

No all i will have done is increased my turnover not profit.

True. but you could have increased your profit ok fine the vat wasn't thete

If you charge someone say £10 that would have been the price that you are happy with based on what you want to earn. If the customer is just as happy to pay £12 after adding VAT, then you havent lost anything have you. Yes you could say i could of charged him £12 and had more profit but you didn't in the first place.

Doesn't change the fact that your out of pocket, your now getting more money with nothing to show for it, plus your price rise
will need to go up more than 20% to cover extra accountancy costs, your time, and things like vat receipts for customers who may want them.

[andyM]

If you charge someone say £10 that would have been the price that you are happy with based on what you want to earn. If the customer is just as happy to pay £12 after adding VAT, then you havent lost anything have you. Yes you could say i could of charged him £12 and had more profit but you didn't in the first place.

Maybe think of it this way then....
You pay 29% on profits currently, then the government will squeeze another 20% on top of that in added vat.
Your sweat and graft from a business that you built from nothing is turning out to be a nice little earner for the taxman.
Meanwhile you are no better off, and likely worse off due to less cleans per year.
But The Palace of Westminster will be extending the wine cellar, fitting diamond encrusted chandeliers and applying Gold Leaf to the interior walls.
Tory MP's will be giving themselves a pat on the back and a pay rise....   

[zesty]

The other thing to add is the fact that many sole traders will be keen to go the cash in hand route to avoid the vat.

So well done Phillip Hammond, you’ve successfully made the cash in hand system more desirable!

More rogue traders, more cash.

But it proabably won’t ever happen, if it does, we can all kick up a massive stink and protest in London with our poles as javelins.

[Stoots]

Full story here..https://www.pressreader.com/uk/the-daily-telegraph/20171104/281513636421195

Well thats going to have a big impact on the way we operate 

Why out of interest? it just something that would be passed on cost wise to the customer, why would that have a big impact on how you  operate ?

VAT isn't passed onto the customer it comes out of your pocket, example if a customer is happy to pay you £20 vat included
they would still be happy to pay £20 without vat.
In other words customers have no interest in how the money is divided up, taxes expenses and so on.

Of course they dont care, but if i'm charging £20 for a house i would then charge plus VAT if i have too, i'm already getting the price i want, my takings will still be the same as it was before VAT so it wont cost me anything.

How does it not cost you anything ? you will have just upped your prices increased your profits and will be no better off, if your happy enough with that then fair enough but don't be fooled into thinking its not you who's paying for it.

No all i will have done is increased my turnover not profit.

True. but you could have increased your profit ok fine the vat wasn't thete

If you charge someone say £10 that would have been the price that you are happy with based on what you want to earn. If the customer is just as happy to pay £12 after adding VAT, then you havent lost anything have you for all you know that customer may have been happy paying £15. Yes you could say i could of charged him £12 and had more profit but you didn't in the first place so what are you losing out on.
Dont get me wrong there are no positives to this at all and it would make things harder for us for sure with people wanting less frequencies etc and of course a forced price increase that has no benefit to the individual and something  nobody really wants to do.

My biggest worry is that 20% would be too much to simply add to people's bills. Let's say you turnover 40k and have the usual tax and N.i etc. By putting the vat on you could potentially lower your turnover to day 35k overnight by losing customers then on top of that you have a VAT bill of 20% plus the admin/accountant costs involved. It would put many a sole trader into financial difficulty to the point where they would be just working to make ends meet and pay their bills. So then you have the problem of those guys saying feck this I'm not grafting all week with the associated stressing of running a business to give half of my turnover away. So what they are going to do is start taking cash in hand or sack it off and claim benefits. There's no incentive to be a sole trader if this happens. It will ruin people chances of starting a business. Anyone else know when setting up you need these tax and N.I breaks until you become financially stable. It's madness

[֍Winp®oClean֍]

I am surprised at the strength of reaction to this, surely this is a good thing being that this place ( up to now) has been the only place on earth where people actually  aspire to be VAT registered?

All it would do is massively increase the sub-20k sole trader wc industry!

[Walter Mitty]

I can always kill myself. Painless that way.

[andyM]

I am surprised at the strength of reaction to this, surely this is a good thing being that this place ( up to now) has been the only place on earth where people actually  aspire to be VAT registered?

Stop it!

[Stoots]

The other thing to add is the fact that many sole traders will be keen to go the cash in hand route to avoid the vat.

So well done Phillip Hammond, you’ve successfully made the cash in hand system more desirable!

More rogue traders, more cash.

But it proabably won’t ever happen, if it does, we can all kick up a massive stink and protest in London with our poles as javelins.

Exactly.

If all of a sudden there's a decrease in people wanting customers to use go cardless or Bacs then we will know why.

Suddenly cash collecting will everyone's favourite payment option again.

And they wonder why people rip off the system.

[Stoots]

I am surprised at the strength of reaction to this, surely this is a good thing being that this place ( up to now) has been the only place on earth where people actually  aspire to be VAT registered?

All it would do is massively increase the sub-20k sole trader wc industry!

Yes on the plus side we can all work 10 hours a week now 

[p1w1]

Full story here..https://www.pressreader.com/uk/the-daily-telegraph/20171104/281513636421195

Well thats going to have a big impact on the way we operate 

Why out of interest? it just something that would be passed on cost wise to the customer, why would that have a big impact on how you  operate ?

VAT isn't passed onto the customer it comes out of your pocket, example if a customer is happy to pay you £20 vat included
they would still be happy to pay £20 without vat.
In other words customers have no interest in how the money is divided up, taxes expenses and so on.

Of course they dont care, but if i'm charging £20 for a house i would then charge plus VAT if i have too, i'm already getting the price i want, my takings will still be the same as it was before VAT so it wont cost me anything.

How does it not cost you anything ? you will have just upped your prices increased your profits and will be no better off, if your happy enough with that then fair enough but don't be fooled into thinking its not you who's paying for it.

No all i will have done is increased my turnover not profit.

True. but you could have increased your profit ok fine the vat wasn't thete

If you charge someone say £10 that would have been the price that you are happy with based on what you want to earn. If the customer is just as happy to pay £12 after adding VAT, then you havent lost anything have you for all you know that customer may have been happy paying £15. Yes you could say i could of charged him £12 and had more profit but you didn't in the first place so what are you losing out on.
Dont get me wrong there are no positives to this at all and it would make things harder for us for sure with people wanting less frequencies etc and of course a forced price increase that has no benefit to the individual and something  nobody really wants to do.

My biggest worry is that 20% would be too much to simply add to people's bills. Let's say you turnover 40k and have the usual tax and N.i etc. By putting the vat on you could potentially lower your turnover to day 35k overnight by losing customers then on top of that you have a VAT bill of 20% plus the admin/accountant costs involved. It would put many a sole trader into financial difficulty to the point where they would be just working to make ends meet and pay their bills. So then you have the problem of those guys saying feck this I'm not grafting all week with the associated stressing of running a business to give half of my turnover away. So what they are going to do is start taking cash in hand or sack it off and claim benefits. There's no incentive to be a sole trader if this happens. It will ruin people chances of starting a business. Anyone else know when setting up you need these tax and N.I breaks until you become financially stable. It's madness

I agree with you completely regarding overall it's a bad thing if it was to happen with the possible extra costs of accountants, less frequencies etc and if a customer is prepared to take the hike or simply cancels it just makes things even harder. My point was the added VAT goes to the customer regardless of what there prepared to pay and what you charge, you cant say that would have been an extra 20% in my pocket if the customer accepts the increase as you were never charging that price in the first place (if that makes sense) i'm certainly no expert in this and of course it brings in extra problems with the chance of less frequencies etc  and people resulting in more fiddling income and cash collecting .

[Dry Clean]

Can you claim for vat twice ?
Example, lets say you have £1000 on expenses and £200 of that is vat, at the moment we can claim back 29% on the £1000
but if we claim back the 20% vat that leaves our expense bill at £800 therefore we would be 9% worse off on £200.
Is this correct ?

[p1w1]

Can you claim for vat twice ?
Example, lets say you have £1000 on expenses and £200 of that is vat, at the moment we can claim back 29% on the £1000
but if we claim back the 20% vat that leaves our expense bill at £800 therefore we would be 9% worse off on £200.
Is this correct ?

Have no idea interesting to know though, i would presume that the £200 you claim back on VAT expenses would be profit and therefore you claim on the percentage on the £800 left, but if that worked in our favour and not the governments then its probably wrong   

[Stoots]

Full story here..https://www.pressreader.com/uk/the-daily-telegraph/20171104/281513636421195

Well thats going to have a big impact on the way we operate 

Why out of interest? it just something that would be passed on cost wise to the customer, why would that have a big impact on how you  operate ?

VAT isn't passed onto the customer it comes out of your pocket, example if a customer is happy to pay you £20 vat included
they would still be happy to pay £20 without vat.
In other words customers have no interest in how the money is divided up, taxes expenses and so on.

Of course they dont care, but if i'm charging £20 for a house i would then charge plus VAT if i have too, i'm already getting the price i want, my takings will still be the same as it was before VAT so it wont cost me anything.

How does it not cost you anything ? you will have just upped your prices increased your profits and will be no better off, if your happy enough with that then fair enough but don't be fooled into thinking its not you who's paying for it.

No all i will have done is increased my turnover not profit.

True. but you could have increased your profit ok fine the vat wasn't thete

If you charge someone say £10 that would have been the price that you are happy with based on what you want to earn. If the customer is just as happy to pay £12 after adding VAT, then you havent lost anything have you for all you know that customer may have been happy paying £15. Yes you could say i could of charged him £12 and had more profit but you didn't in the first place so what are you losing out on.
Dont get me wrong there are no positives to this at all and it would make things harder for us for sure with people wanting less frequencies etc and of course a forced price increase that has no benefit to the individual and something  nobody really wants to do.

My biggest worry is that 20% would be too much to simply add to people's bills. Let's say you turnover 40k and have the usual tax and N.i etc. By putting the vat on you could potentially lower your turnover to day 35k overnight by losing customers then on top of that you have a VAT bill of 20% plus the admin/accountant costs involved. It would put many a sole trader into financial difficulty to the point where they would be just working to make ends meet and pay their bills. So then you have the problem of those guys saying feck this I'm not grafting all week with the associated stressing of running a business to give half of my turnover away. So what they are going to do is start taking cash in hand or sack it off and claim benefits. There's no incentive to be a sole trader if this happens. It will ruin people chances of starting a business. Anyone else know when setting up you need these tax and N.I breaks until you become financially stable. It's madness

I agree with you completely regarding overall it's a bad thing if it was to happen with the possible extra costs of accountants, less frequencies etc and if a customer is prepared to take the hike or simply cancels it just makes things even harder. My point was the added VAT goes to the customer regardless of what there prepared to pay and what you charge, you cant say that would have been an extra 20% in my pocket if the customer accepts the increase as you were never charging that price in the first place (if that makes sense) i'm certainly no expert in this and of course it brings in extra problems with the chance of less frequencies etc  and people resulting in more fiddling income and cash collecting .

I completely understand your point and your are correct. But if like most cleaners they would like to put there prices up every few years for inflation then not only would they have to stick 20% on they would also be saying Goodbye to any planned prices rises or inflation for a few years as I don't think  20% plus another 10% for bi-annual price increase would go down right well 

[p1w1]

Full story here..https://www.pressreader.com/uk/the-daily-telegraph/20171104/281513636421195

Well thats going to have a big impact on the way we operate 

Why out of interest? it just something that would be passed on cost wise to the customer, why would that have a big impact on how you  operate ?

VAT isn't passed onto the customer it comes out of your pocket, example if a customer is happy to pay you £20 vat included
they would still be happy to pay £20 without vat.
In other words customers have no interest in how the money is divided up, taxes expenses and so on.

Of course they dont care, but if i'm charging £20 for a house i would then charge plus VAT if i have too, i'm already getting the price i want, my takings will still be the same as it was before VAT so it wont cost me anything.

How does it not cost you anything ? you will have just upped your prices increased your profits and will be no better off, if your happy enough with that then fair enough but don't be fooled into thinking its not you who's paying for it.

No all i will have done is increased my turnover not profit.

True. but you could have increased your profit ok fine the vat wasn't thete

If you charge someone say £10 that would have been the price that you are happy with based on what you want to earn. If the customer is just as happy to pay £12 after adding VAT, then you havent lost anything have you for all you know that customer may have been happy paying £15. Yes you could say i could of charged him £12 and had more profit but you didn't in the first place so what are you losing out on.
Dont get me wrong there are no positives to this at all and it would make things harder for us for sure with people wanting less frequencies etc and of course a forced price increase that has no benefit to the individual and something  nobody really wants to do.

My biggest worry is that 20% would be too much to simply add to people's bills. Let's say you turnover 40k and have the usual tax and N.i etc. By putting the vat on you could potentially lower your turnover to day 35k overnight by losing customers then on top of that you have a VAT bill of 20% plus the admin/accountant costs involved. It would put many a sole trader into financial difficulty to the point where they would be just working to make ends meet and pay their bills. So then you have the problem of those guys saying feck this I'm not grafting all week with the associated stressing of running a business to give half of my turnover away. So what they are going to do is start taking cash in hand or sack it off and claim benefits. There's no incentive to be a sole trader if this happens. It will ruin people chances of starting a business. Anyone else know when setting up you need these tax and N.I breaks until you become financially stable. It's madness

I agree with you completely regarding overall it's a bad thing if it was to happen with the possible extra costs of accountants, less frequencies etc and if a customer is prepared to take the hike or simply cancels it just makes things even harder. My point was the added VAT goes to the customer regardless of what there prepared to pay and what you charge, you cant say that would have been an extra 20% in my pocket if the customer accepts the increase as you were never charging that price in the first place (if that makes sense) i'm certainly no expert in this and of course it brings in extra problems with the chance of less frequencies etc  and people resulting in more fiddling income and cash collecting .

I completely understand your point and your are correct. But if like most cleaners they would like to put there prices up every few years for inflation then not only would they have to stick 20% on they would also be saying Goodbye to any planned prices rises or inflation for a few years as I don't think  20% plus another 10% for bi-annual price increase would go down right well 

Absolutely mate.

[Dry Clean]

At the end of the day you could say the customer pays for everything including tax and NI but it certainly doesn't feel that way
when the money comes out of your account.
Fact is an employee will now be paying a lot less tax than somebody self employed if on the same money.

[windowswashed]

My mortgage is paid off, I'm debt free and I get my army pension in 7 years time and I am gradually reducing my work so I would make sure I slide under the VAT level, no incentive to work hard for the taxman and the VAT guys. Plan on taking more time off for long breaks like the rich do by leaving the UK for up to  three months each year.

[Lee Pryor]

Really don't see what all the fuss is. Lots of window cleaners are vat registered. We have been for 10 years. No problems. I think it's a good thing to have a totally even playing field for everyone. As with most things it's just the fear of the unknown that worries people.

Yes people will start having to run things more like a proper business. Lots you can do to balance the money back to you, go ltd and do away with n.i and pay less income tax with dividends. Only put your price up by 10%, swallow the other 10% but even that out with claim backs on kit, fuel ect.

As for going collecting more cash, you can't rent or buy a house based on cash or a decent car or holiday. You can't have a decent life based on cash. More will get done by the tax man and vat avoidance is about the worst thing to be hit with.

[Dry Clean]

Totally agree WW, Thankfully I'm in a similar position and will be doing the same, I don't mind paying my share in taxes but to watch somebody in an office job on the same or more money than me paying 20% less in tax is something I just couldn't handle.
I do feel for the many out there who will have no choice but to get on with it.