[Stoots]

Just after some advice from those who have gone over 

at what point does it become "worth it" in terms of how many vans or staff or level of turnover/profit before you start to earn money again

ive got enough customers now  on paper where im at the threshold, not sure where to go from here really keep going or stay under....

Just so ive got this right in my head if i turn over 100k i hand over 20%, so 20k to the vat man leaving me worse off than would be under ? this seems ludicrous its like i need to jump from 85k to 120k overnight to not lose any profit ?

how did you guys get past this hurdle ?

thanks

[Smudger]

in theory you are right - but not really correct - as everything you buy that has VAT comes off that total. ie petrol and equipment - we are unlucky as in our trade we don't really buy a lot 

Also and it may have changed the first year is 11% not 20%

what I did was really push when at the threshold ( its a rolling 12 months calculation ) to get in more work and more commercial where I could charge 20% while on the 11% - the offset worked well

VAT is not a nice tax as its on every £ you bring in regardless of profit

Darran

[Ched]

I think there is a flat rate 'margin' scheme that might help as we don't usually buy much.
Ask your accountant about the margin scheme as it might work out for you at the beginning.

[Smudger]

Also - if memory serves you can backdate some purchases to reclaim the VAT - like vehicle purchase - but your now getting into some serious accounting so as above get the accountant to do the donkey work - they will save you a fortune

Darran

[jo5hm4n]

Just after some advice from those who have gone over 

at what point does it become "worth it" in terms of how many vans or staff or level of turnover/profit before you start to earn money again

ive got enough customers now  on paper where im at the threshold, not sure where to go from here really keep going or stay under....

Just so ive got this right in my head if i turn over 100k i hand over 20%, so 20k to the vat man leaving me worse off than would be under ? this seems ludicrous its like i need to jump from 85k to 120k overnight to not lose any profit ?

how did you guys get past this hurdle ?

thanks

Go Flat Rate VAT mate, its 12% instead of 20% and first year is actually 11%.  So for example on 85k Turnover - VAT would be around £9350.  So realistically if you just upped your turnover to 100k per year minus £11k VAT this would still leave you at around £89k after VAT bill and before expenses.  So i would say 100k per year is like the break even number but then after that your profits will start to grow more.

Also you can reclaim VAT on capital assets over £2k that you have purchased such as a van or equipment.  So you could end up getting some relief in your first year of VAT payments if you have or plan to get another van on the road.

[Stoots]

OK thanks chaps I will have  to speak to my accountant and work out the numbers involved. My accountant is a bit useless so I'll probably after try a new accountant   

I did buy a brand new van last year with 6k of vat on it so being able to put that through would be an advantage.

[zesty]

You must have a massive round now Adam, mostly domestic? Are you hoping to send your new employee out on his own?

[Stoots]

You must have a massive round now Adam, mostly domestic? Are you hoping to send your new employee out on his own?

I wouldn't say massive but cleaner planner is telling me i have 86k a year. About 700 customers now over half of them are 8 weekly the rest 4.

I took him on at the beginning of march and I've added about 70 new customers since then. Im not daft enogh to think all those customers will stick around a lot will drop off over time so i dont want to take my foot of the throttle and keep looking for more work. It's all domestic window cleaning and I've not started trying to push the add ons or get into commercial yet which are other options.

We are currently Working just 2 in a van and we could stay comfortably under the vat working like this but as ive found out before its not really efficent. We have been doing 450 a day working till about 3pm but i know in 2 vans we could do 300 each and probably be finished earlier to boot. I'm going to get another van in the next few weeks. The lad i have is brilliant hes been doing it years so has come stright in and cracked on and hes worked on his own for years following cleaner planner so ive no worries at all about sending him out alone asap. I also know he won't be with me forever ultimately he wants his own business so I want to be looking for that next employee soon if I am going to go for it .

[Bucket]

Another small bit of advice if going VAT registered - setup a new bank account for VAT payments. 

We pay VAT quarterly and it's essential that the money is set aside to pay the bill!

[Matt.]

So this is ur dilemma mate

the new lad is doing great but u already no long term ur guna lose him so expanding while u have him could be the worst thing ever, on the flip side to it start looking for ur next employee and get him out part time while he’s learning.
This is we’re am at now, looking for the next employee,
I personally am not looking for extra work but it keep coming my way but good staff are so hard to find, trust is a big part of the job and maintaining standards when ur not about.

With 1 member of staff full time and urself working ur aim is going to be about 10k per month income plus vat which is 144k turn over number below that might be painful

U must be having 1k a week = 4K
Staff wages = 2k
Accountant fees for vat returns and payroll
Vans and fuel
The list goes on mate

Then u increase ur income an things are going great ur staff member leaves an u have no way possible of getting though the amount of work on ur own so then u loosing the battle and hate the job ……. Then u will post on here saying u want out of window cleaning an looking to become a hot dog 🌭 seller in New York 😂😂😂

Best of luck mate which ever  way u go

[NBwcs]

I love reading these type of threads, it just reminds me of why I never want to be anything other than a one man band. Each to their own.

[Ggh]

Personally, I don’t think it’s worth it unless you go for at least £250,000 pa. Not worth the hassle and bill poop.
We all run differing business’ in different ways though.

Good luck!

[zesty]

I love reading these type of threads, it just reminds me of why I never want to be anything other than a one man band. Each to their own.

My plan is to stop on the window cleaning tools, have an employee running the window cleaning rounds, whilst I do something different, perhaps softwashing, pressure washing and gutter clearing. Just to get out and keep some involvement.

Problem I have is getting enough softwahsing work etc.

[andycap]

Brilliant thread👏🏻 I often thought how do you overcome that vat bit...not that it would ever effect me!
But seems like a lot of hassle to get the numbers to make it worthwhile 🤔..but I suppose if your young and ambitious 😉..Matt those numbers illustrate how difficult it could be👍..but I fully understand how  some of us want those sort of earnings..this is what a forum really is about,harnessing peoples experience and knowledge 👌

[Stoots]

I love reading these type of threads, it just reminds me of why I never want to be anything other than a one man band. Each to their own.

My plan is to stop on the window cleaning tools, have an employee running the window cleaning rounds, whilst I do something different, perhaps softwashing, pressure washing and gutter clearing. Just to get out and keep some involvement.

Problem I have is getting enough softwahsing work etc.

This is another option and I must admit its very appealing 

Stay under vat, have 1 guy working 5 days a week pay him maybe 25k a year. Would mean I would only need to work 1 or 2 days a week and still be left with about 60k before expenses. Would probably only need to chip in any more to cover bad weather and holidays/sickness.

[zesty]

I love reading these type of threads, it just reminds me of why I never want to be anything other than a one man band. Each to their own.

My plan is to stop on the window cleaning tools, have an employee running the window cleaning rounds, whilst I do something different, perhaps softwashing, pressure washing and gutter clearing. Just to get out and keep some involvement.

Problem I have is getting enough softwahsing work etc.

This is another option and I must admit its very appealing 

Stay under vat, have 1 guy working 5 days a week pay him maybe 25k a year. Would mean I would only need to work 1 or 2 days a week and still be left with about 60k before expenses. Would probably only need to chip in any more to cover bad weather and holidays/sickness.

Yep, that’s why it appeals to me. I think it’s a good balance. Means when you one day retire, you’ve got an income always there. Obviously it means losing said employee every now and then, but essentially you’ve always got a full time job for someone whilst you please yourself!