VAT Registration

[Hobosapien]

They can only easily collect VAT from the likes of us. Collecting excise duty and VAT from sellers on Amazon/eBay/whatever using UK ports is just too much like hard work. Hence the EU fining the British government.

They may as well scrap it then, and get more tax from the profits when the companies no longer have to charge VAT but don't drop their prices either.

[SueEllen]

In the b2b world, which we are as a contractor using a ltd to invoice agencies/clients, VAT is a completely pointless pain in the ass. You just charge vat on the invoices and pay it to HMRC.

No benefit whatsoever, apart from when they piss about with the rules (e.g. introduce a flat rate so Ltds potentially get a bit of a handout for the hassle) then decide to change the rules anyway to keep their civil servants busy so the advantages are much reduced.

It's one of those things that if HMRC and the government really wanted to simplify things and reduce costs to business administration and their own costs managing it all, they could just restrict VAT being applicable for b2c transactions (i.e the sales tax it was intended to be). Of course, they're too incompetent or self motivated (job creation to keep themselves busy until they can retire on a nice cushty pension) to do something so obvious.

So welcome to the party pal. At least VAT is one of the simplest things to manage on the list of things you need to do running a Ltd. I've done my own VAT for years, to save on some accountancy fees, so while some say 'get an accountant' you don't actually need one for managing the VAT alone.

They can only easily collect VAT from the likes of us. Collecting excise duty and VAT from sellers on Amazon/eBay/whatever using UK ports is just too much like hard work. Hence the EU fining the British government.

[Hobosapien]

In the b2b world, which we are as a contractor using a ltd to invoice agencies/clients, VAT is a completely pointless pain in the ass. You just charge vat on the invoices and pay it to HMRC.

No benefit whatsoever, apart from when they piss about with the rules (e.g. introduce a flat rate so Ltds potentially get a bit of a handout for the hassle) then decide to change the rules anyway to keep their civil servants busy so the advantages are much reduced.

It's one of those things that if HMRC and the government really wanted to simplify things and reduce costs to business administration and their own costs managing it all, they could just restrict VAT being applicable for b2c transactions (i.e the sales tax it was intended to be). Of course, they're too incompetent or self motivated (job creation to keep themselves busy until they can retire on a nice cushty pension) to do something so obvious.

So welcome to the party pal. At least VAT is one of the simplest things to manage on the list of things you need to do running a Ltd. I've done my own VAT for years, to save on some accountancy fees, so while some say 'get an accountant' you don't actually need one for managing the VAT alone.

[northernladuk]

You're completely wrong.

Get an accountant.

[Alan @ BroomeAffinity]

"Get an accountant" is coming. But in the meantime...

You're misunderstanding the fundamentals of VAT registration. You don't need to register for VAT until you actually breach the threshold and even then it's not backdated. You only charge VAT from then. So if you've done £85k already in the year, and you register for VAT now, the £85k won't be subject to VAT, only what's being charged from now.

But, get an accountant. And if you already have one, ask them about this. And if you already have, get a new one.

[NobotTheRobot]

Hi all,

I've noticed that at my current daily rate I'll need be over VAT threshold by the end of this tax year. I've been reading up on the VAT stuff but still not entirely sure about it.

So looks like I'll need to register around October. Does it mean that I will have to pay 20% extra tax over my entire turnover for the year? I haven't charge a single penny for VAT so it sounds really unreasonable. Not sure if that's how it works.

Do you think I would be better off if I volunteered for VAT so that at least I could start charging VAT?

I can understand it for my 2nd year in VAT as I would have charged 20% extra the whole year and I can simply give it to HMRC. I wouldn't mind that. But if that applies to the first year too that sounds like a massive amount of tax.

Please let me know what you think and feel free to tell me I'm completely wrong!

Thanks.