Charlottechicken Posted October 25, 2006 Share Posted October 25, 2006 I am guessing there are some of you out there who are self employed and might be able to help me. If you volunteer to be VAT registered do you have to charge VAT to your customers or not? It looks like you do on the HMRC website, but it is not clear, and if you do have to charge VAT what is the advantage of being registered if your turnover is less than the threshold? (as surely VAT paid out on stock/supplies will always be less than VAT charged on final product?) I had (wrongly?) assumed that volunteering for VAT registration would mean one could claim back VAT paid on stock/supplies and just submit VAT returns when required. I think this may be a rather large can of worms HELP! Quote Link to comment Share on other sites More sharing options...
Jools Posted October 25, 2006 Share Posted October 25, 2006 Once you are VAT registered you will need to charge all of your customers VAT all of the time. The plus side is that you can claim back the VAT on just about all of your business purchases, so basically you are saving the VAT on what you buy (for the business). The returns have to made quarterly. If it's just a small business, then it's fairly simple to do it yourself, but it can get onerous for a larger business and require the services of a good book-keeper. Quote Link to comment Share on other sites More sharing options...
Cinnamon Posted October 26, 2006 Share Posted October 26, 2006 Ditto what Jools has said. We are VAT registered,& I do the VAT every quater - its pretty easy,but time consuming. The plus side is that we can claim back for lots - stationary,clothing,etc in the name of the company. If you are under the threshold,I wouldn't register myself......but you may well get more inspections to check that you are in fact under the threshold Quote Link to comment Share on other sites More sharing options...
Lesley Posted October 26, 2006 Share Posted October 26, 2006 ditto Sarah and Jools. The other advantage is that if you are, or will be, near the threshold and would then have to start charging VAT then it is easier to start straight away. That way you don't suddenly have to start charging your customers when they haven't been charged VAT previously and if you have stationery printed, then it doesn't need changing. Quote Link to comment Share on other sites More sharing options...
Charlottechicken Posted October 26, 2006 Author Share Posted October 26, 2006 Thanks all for your replies. So, there is no advantage to be had in voluntarily registering for VAT if you are below the threshold? Apart from you get a nice VAT number to put on your stationery Wonder why they suggest people do register voluntarily Quote Link to comment Share on other sites More sharing options...
ubereglu Posted October 27, 2006 Share Posted October 27, 2006 I think if it's a small business that if you earn less than £3000 a year you don't have to pay or charge VAT. Quote Link to comment Share on other sites More sharing options...
