De registering for VAT

[BolshieBastard]

My current Ltd co is registered for VAT and on the FRS.

However, as I've not worked away from home for over 5 years, I've little in the way of expenses to claim any VAT back.

The FRS has lessened the burden of completing the VAT returns but I dont see much point of being an unpaid tax collector.

So, Im thinking of de registering for VAT if the threshold goes over 75K.

Are there many agents who insist on VAT registration?

[pmeswani]

My current Ltd co is registered for VAT and on the FRS.

However, as I've not worked away from home for over 5 years, I've little in the way of expenses to claim any VAT back.

The FRS has lessened the burden of completing the VAT returns but I dont see much point of being an unpaid tax collector.

So, Im thinking of de registering for VAT if the threshold goes over 75K.

Are there many agents who insist on VAT registration?

Maybe I missed something, but you don't claim VAT back on expenses if you are on FRS. There's still advantages in being VAT & FRS registered.

(I know there are exceptions to the rule, but I hope you get my point).

[BolshieBastard]

Maybe I missed something, but you don't claim VAT back on expenses if you are on FRS. There's still advantages in being VAT & FRS registered.

(I know there are exceptions to the rule, but I hope you get my point).

Nah, you misread it.

I used to reclaim VAT on expenses when I wasnt on the FRS. Now Im on the FRS, there are no VAT expenses to reclaim.

VAT registration, even on the FRS is just one more thing HMRC can use to investigate your co. Therefore, de register and its one less thing to worry about.

There are no advantages of being VAT FRS registered againt not being registered if you have no VATable expense claims.

[pmeswani]

Nah, you misread it.

I used to reclaim VAT on expenses when I wasnt on the FRS. Now Im on the FRS, there are no VAT expenses to reclaim.

VAT registration, even on the FRS is just one more thing HMRC can use to investigate your co. Therefore, de register and its one less thing to worry about.

There are no advantages of being VAT FRS registered againt not being registered if you have no VATable expense claims.

I've re-read it and understood it. I don't know what type of work you do and whether there are any agencies involved.... but I would have thought that being VAT registered (with FRS) had some advantages irrespective of the potential hazard of being investigated.

[Fred Bloggs]

Surely being on the FRS is worth 3 or 4 percent of your turnover to you, depending on your FRS category? That's worth having, is it not?

[centurian]

There are no advantages of being VAT FRS registered againt not being registered if you have no VATable expense claims.

For every 10K, you pay HMRC £166 less than you invoice your customers for VAT (under 15% rate)

This extra amount is used to offset the VAT you pay on your purchases. So as long as the VAT component on your purchases comes to less than this amount, you are better off.

A typical LtdCo with 60K net invoices and 2K company expenses (£300 of which is VAT) will be about £700 pa better off.

[centurian]

Are there many agents who insist on VAT registration?

I think some will get funny about it. They'll wonder if you're doing something illegal, which could come back to bite them.

Whether this will cost you any contracts - impossible to say. They might back down quickly, or they might simply offer it to someone else who is VAT registered.

[PhilAtBFCA]

VAT FRS - is it worth it ?

BolshieBastard

As soemone else has pointed out , you will be gaining from being in the FRS as you will be paying less to the Vat office then you are bringing in.

If you are not - then you should not be on the FRS scheme, so you may need some advice.

One other point worth mentioning I think, is that VAT registration numbers maybe used by an agency to validate the fact that your company exists and that you are in business, and is an indicator, albeit a small one , of being in business on your own account.

I personally think that if you want to be in business, and show that you are in business and mean it, then a VAT registration does add to that, rather than take away from it.

There is a bit of extra hassle, yes, but that what being in business is about.

As far as an extra chance for HMRC to look at you is concerened, then if you are doing the right things then why would you ever worry about that ?

HMRC looking at your books and records is not a threat at all, they are not out to get you, unless of course you are doing something that you shouldnt be.

Phil