Donate to Remove ads

Got a credit card? use our Credit Card & Finance Calculators

Thanks to Raasu,Wasron,Steffers0,Anonymous,CryptoPlankton, for Donating to support the site

VAT Changes

Startups, marketing and more
foundone
Lemon Pip
Posts: 66
Joined: November 5th, 2016, 8:58 pm
Has thanked: 2 times

VAT Changes

#8672

Postby foundone » November 24th, 2016, 5:30 pm

Are all the PSCs going to de-register for the Flat Rate scheme now that the rate is increasing to 16.5%? The flat rate is paid on the gross so £1000+VAT is £1,200 * 16.5% giving £198 for the taxman and £2 for you. As you can't reclaim any VAT under the Flat Rate scheme unless it is an exceptional expenditure of £2,000 or more, just being able to claim back the VAT on my accountants fee would save me money :evil:

deadeyedjacks
Posts: 20
Joined: November 24th, 2016, 8:54 pm
Has thanked: 13 times
Been thanked: 3 times

Re: VAT Changes

#8750

Postby deadeyedjacks » November 24th, 2016, 9:01 pm

That was no doubt the intention of the change...

Either stay on FRS and lose money or move back to standard rate and pay exactly what's due.

No more marginal gains each quarter :-(

rustycables
Posts: 2
Joined: November 8th, 2016, 10:24 am

Re: VAT Changes

#10292

Postby rustycables » November 30th, 2016, 10:20 am

What about not registering for VAT.

If you don't charge it do you still pay it?

melonfool
Lemon Quarter
Posts: 2844
Joined: November 4th, 2016, 11:18 am
Has thanked: 1167 times
Been thanked: 637 times

Re: VAT Changes

#10306

Postby melonfool » November 30th, 2016, 11:05 am

rustycables wrote:What about not registering for VAT.

If you don't charge it do you still pay it?


Yes, you still pay it. If you go to Currys and buy a new PC they charge VAT, you can't tell them not to, it's they who have to charge it so you have to pay it. If you're not registered then you can't claim it back. I think I might deregister, I don't buy enough to make it worthwhile really.

Mel

Slarti
Lemon Quarter
Posts: 2941
Joined: November 4th, 2016, 3:46 pm
Has thanked: 642 times
Been thanked: 492 times

Re: VAT Changes

#10311

Postby Slarti » November 30th, 2016, 11:10 am

rustycables wrote:What about not registering for VAT.

If you don't charge it do you still pay it?


Well not to HMRC, but you can't recover what you have paid out on expenses, so you have to do the sums.

Plus some business customers are not to happy about dealing with a contractor who is not VAT registered.

Slarti

melonfool
Lemon Quarter
Posts: 2844
Joined: November 4th, 2016, 11:18 am
Has thanked: 1167 times
Been thanked: 637 times

Re: VAT Changes

#10314

Postby melonfool » November 30th, 2016, 11:14 am

Slarti wrote:
rustycables wrote:What about not registering for VAT.

If you don't charge it do you still pay it?


Well not to HMRC, but you can't recover what you have paid out on expenses, so you have to do the sums.

Plus some business customers are not to happy about dealing with a contractor who is not VAT registered.

Slarti


I am considering unregistering and putting my rates up..... :)

Your second point is one of the reasons I registered so I will need to look into that. What a pain it is.

Mel

brightncheerful
Lemon Quarter
Posts: 1168
Joined: November 4th, 2016, 4:00 pm
Has thanked: 53 times
Been thanked: 154 times

Re: VAT Changes

#10381

Postby brightncheerful » November 30th, 2016, 12:48 pm

According to my accountant, the flat rate change only affects businesses whose expenses are 2% or less than revenue. Rather than miss out on the profit potential in the FRS, couldn't you increase your expenses?

deadeyedjacks
Posts: 20
Joined: November 24th, 2016, 8:54 pm
Has thanked: 13 times
Been thanked: 3 times

Re: VAT Changes

#10401

Postby deadeyedjacks » November 30th, 2016, 1:39 pm

HMRC are wise to that one ;-)
They are also redefining qualifying expenditure for FRS.

You might find this link useful.
http://www.intouchaccounting.com/resour ... mber-2016/

melonfool
Lemon Quarter
Posts: 2844
Joined: November 4th, 2016, 11:18 am
Has thanked: 1167 times
Been thanked: 637 times

Re: VAT Changes

#10410

Postby melonfool » November 30th, 2016, 2:04 pm

deadeyedjacks wrote:HMRC are wise to that one ;-)
They are also redefining qualifying expenditure for FRS.

You might find this link useful.
http://www.intouchaccounting.com/resour ... mber-2016/


"We currently understand that qualifying expenditure excludes the purchase of capital assets, food and drink consumed by the business or employees (subsistence) and motoring costs. "

Well, that's everything! And I'm under the limit anyway, so over £3k pa worse off. Two options, go back to 'not flat rate', or deregister.

Mel

StepOne
Lemon Slice
Posts: 588
Joined: November 4th, 2016, 9:17 am
Has thanked: 174 times
Been thanked: 144 times

Re: VAT Changes

#12108

Postby StepOne » December 5th, 2016, 2:42 pm

Another option would be to increase the rate you charge?

Slarti
Lemon Quarter
Posts: 2941
Joined: November 4th, 2016, 3:46 pm
Has thanked: 642 times
Been thanked: 492 times

Re: VAT Changes

#12182

Postby Slarti » December 5th, 2016, 5:04 pm

StepOne wrote:Another option would be to increase the rate you charge?


Not so easy in the current financial climate.

Slarti

bentoncollier
Posts: 2
Joined: February 15th, 2018, 8:36 am

Re: VAT Changes

#118309

Postby bentoncollier » February 15th, 2018, 8:43 am

With the flat-rate: you pay a fixed VAT to HMRC. you keep the difference between what you charge to your customers and pay to HMRC. you can not reclaim the VAT on your purchases - with the exception of certain capital goods of more than £ 2,000. 8-) 8-)

Source:-DNS Accountants


Return to “Running a Business”

Who is online

Users browsing this forum: No registered users and 1 guest