[Dean Taberner]

Hi guys,

Ive now got 1 full time employee and 1 part time 19 yo lad who could easily become full time.

I love canvassing and taking on new work and im ready to move on to the next level.

BUT.........................................

Once youve reached the magic figure RE Vat threshold and fingers crossed ill hopefully come close or hit it next year,

How will customers (cash customers that is) cope with the 15% increase?

Or are you better dropping the cash and going 100% contract work?

Dean

[NWH]

Ask your Mrs to start a cleaning company all of a sudden lol,the way things are at the moment even if you have 2-3 year contracts they mean nothing if they go bust.If you can avoid VAT until the storm settles.

[Dean Taberner]

NWH

Thanks for the reply,

I dont think there are any answers in this enviroment.

Its impossible.

Bring on Santa 

Dean

[ok cleaning]

it is not how many people you employ it is how much you turn over qualifies you for vat but  being vat registered is not a good idea if you only or mostly do domestic couse if you tink so many wc dont even pay any tax and the many legaly tax payer wc are self employed or ltd  companies                    and so vat will make you more expensive than the this people and less competetive you have to cut down on your profite level because it is very very difficult to charge vat from domestic customer when there are very cheaper alternatives around

[geefree]

once you start with v.a.t..... you are entering a different world....

every penny has to be worked out with vat in mind... even your lunch...,lol

[alanwilson]

vat to me means very awkward tax

its a nightmare to begin with but when we went VAT registered we simply held off on our price increase (thus paying the vat ourselves) and at the start of our next financial year (april 05) we put the prices of all our domestic work up by 17.5% - it worked well but sometimes you get awkward prices such as £15 + VAT @ 17..5% = £17.63.  Thus we then adjusted all our prices so that the amount the customer would be paying would be a 'whole' amount such as £15 so before VAT we got £12.76 of that.

this was for our domestic customers, commercial customers simply got the vat added on butthey could obviously claim that back meaning it made no difference to them.

now that the vat rate has changed our domestic work actually makes us more money as instead of losing 17.5% turnover we now only lose 15%.

see now what I mean? Very Awkward Tax

[William Tyndale]

now that the vat rate has changed our domestic work actually makes us more money as instead of losing 17.5% turnover we now only lose 15%.

I think you will find you need by law to give them the discount and not pocket it yourself!

[alanwilson]

no unless they are VAT registered then I don't, the price they are paying now is the same as before.

[Helen]

no unless they are VAT registered then I don't, the price they are paying now is the same as before.

for the small amount to each customer it really is not worth all the fuss that is going on about it. We have offered the reduced rate, as per the letter all vat registered businesses received that says that you can only charge vat at 15%. Some customers have paid the lower amount, some have just paid what they expected to pay. Whether or not your customer is vat registered makes no difference at all. If you are vat registered, then whatever way you look at it you are charging vat. That's the rouble with working backwards and netting down. You should give your nett price and then gross up to include your vat. If you are making any profit from vat then you are doing something wrong. I belive the ones that can leave the prices the same are shops, hairdressers i.e retail trade, whereas we are a service industry.

[William Tyndale]

Helen, thats how I understood it, sadly some will try to make money any way they can.

Personally I feel its best to add VAT on instead of working backwards. It does make some funny prices, but my prices are generally a round figure anyway.

[William Tyndale]

It is a discount from the non VAT payers point of view.









Well it is for those that get it.  :

[ronnie paton]

yes you have to pass on the new rate but if you keep your prices the same like many have that does not mean they are charging you more vat

[Dean Taberner]

What I meant by this post is how much per day per man do you set your target at?

For example if you had your target at £150 per day per man you would fly thru the VAT threshold with 3 men.

I was wondering what a realistic target is per employee per day to make it worthwhile.

What im thinking is that if i cant get enough commercial work to jusify goin VAT registered then theres no point building up my cash work to get more employees just so i can be a VAT collector.

I may as well keep it simple with just 2 of us and stay clear of the threshold.

Dean

[Helen]

yes you have to pass on the new rate but if you keep your prices the same like many have that does not mean they are charging you more vat

No it doesn't, it means they are making more on their nett charge.