VAT Registration

[GlasgowBob]

Not quite right. If you are VAT registered but NOT on the FRS then you can claim back the VAT on things your company buys. If you ARE on the FRS then you can't claim back VAT on things your company buys but in return for this, you get to keep a cut of the VAT you charge to your customers.

Compared to not being VAT registered, registering for VAT and the FRS will bring a profit of 3.8% of your ex-VAT turnover in the first year and 2.6% in the years after that.

If the value of your companies purchases/expenses (ex VAT) amount to more than 10% of your (ex VAT) turnover then it's probably not worth signing up for the FRS. If your expenses are this high then you should get VAT registered so you can claim back the VAT.

If your company pays out less than 10% in expenses then you are probably better off using the FRS (it's simpler too).

Be aware that some expenses like train travel don't have any VAT.

I'm sure your accountant can sort it all out with a minimum amount of fuss, give them a shout.

Thanks mate, I'll give my accountant a call.

 

[Wanderer]

Thanks mate, I'll give my accountant a call.

You may want to ask them why they didn't suggest you register for VAT and join the FRS without being prompted. It's money for nothing (well a little bit of admin is involved but not much).

Perhaps they did mention it to you but it got lost in a pile of other generic advice.

 

[psychocandy]

Not quite right. If you are VAT registered but NOT on the FRS then you can claim back the VAT on things your company buys. If you ARE on the FRS then you can't claim back VAT on things your company buys but in return for this, you get to keep a cut of the VAT you charge to your customers.

Compared to not being VAT registered, registering for VAT and the FRS will bring a profit of 3.8% of your ex-VAT turnover in the first year and 2.6% in the years after that.

If the value of your companies purchases/expenses (ex VAT) amount to more than 10% of your (ex VAT) turnover then it's probably not worth signing up for the FRS. If your expenses are this high then you should get VAT registered so you can claim back the VAT.

If your company pays out less than 10% in expenses then you are probably better off using the FRS (it's simpler too).

Be aware that some expenses like train travel don't have any VAT.

I'm sure your accountant can sort it all out with a minimum amount of fuss, give them a shout.

WHS +1

Cant see why you'd ever not bother to register for VAT and flat rate. As demonstrated above, its free money....