SHOULD I BE VAT REGISTERED?

Wondering if you business should (or needs to!) be VAT registered? Well watch on.
In this video Dan runs through some tips of when this might be a good idea, and when you don’t have a choice!
Topics include:
Should you register for VAT early
What types of business should VAT register
When do you have to VAT register
How to VAT register
Can you claim VAT back
How to claim VAT back
When is it not a good idea to VAT register
Making Tax Digital for VAT
VAT book-keeping
..... and more!
Our blog for worked examples of VAT pricing: www.heelanassociates.co.uk/wh...
HMRC link to VAT registration info: www.gov.uk/vat-registration/w...
Further Video on VAT: • VAT FOR BUSINESS EXPLA...
You can see more tax and business tips on the following:
LinkedIn (Dan Heelan): / danheelan
Instagram (Dan Heelan): / danheelan
Podcast: heelanhub.co.uk The HeelanHub Podcast, a show for small business owners.
Join our mailing list for tax tips at: www.heelanassociates.co.uk
Instagram (Company): / teamheelan
Facebook (Company): / heelanassociates
Twitter (Company): / heelanassocs
Web: www.heelanassociates.co.uk
Call: 02392 240040 Email: [e-mail]
Author: Dan Heelan of Heelan Associates
#accounting #Tax #VAT

[@jolantawnuk4825]

Great video! Thank you for this channel!

[@HeelanAssociates]

Glad you enjoy 😃

[@graemekowalewicz197]

Thank you for such a easy to follow explanation!! This is something that I've just been looking into and your video helped massively!!

[@HeelanAssociates]

Glad it helped Graeme!

[@Bacrenfencing]

I have had to register recently due to hitting the threshold and it is something that really stressed me out because I imagined suddenly becoming hypothetically 20% more expensive. To cut a long story short, I started sending out quotes as I normally would and treated them as VAT registered. I was genuinely surprised that I still won most of these jobs even with VAT added. I then analysed my normal way of quoting compared to that of quoting with VAT and by the time I had taken into account all the VAT that I could claim back on materials etc, my actual pricing was only around 6-8% higher than if I was not registered. I think there is a lot of smoke and mirrors with VAT and basically, if you want to grow a business, then you really do need to register. I know everyone's situation id different, but in my line of work, materials constitute a large portion of my turnover, so VAT registration has been a good thing (I think) but we will see going forwards. At least now I don't have the constant worry of going over the 85K and can actually concentrate on growing my turnover unhindered.

[@HeelanAssociates]

Love this reply! This is the experience many traders have.

[@ct9914]

Very useful, thank you.

[@HeelanAssociates]

Glad it helped!

[@cruthaighprints9827]

I’m not near the threshold yet but just wanted to say how thankful I am for all these videos. They’re so helpful and I’m sure so many others find them useful too. Do you offer online accountancy services or is it face to face? Thanks

[@HeelanAssociates]

Hi, glad you enjoy the videos! We like a relationship with our clients, so wouldn't describe us as 'online accounting', but thanks to our use of modern tech it means we have clients all over the world! Oddly we have more clients a distance from us than we do local these days!

[@umeransari4566]

Thank you for your knowledgeable video. I have some questions which I need some guidance for selling inside France. 1. Is a company registered in France (with Non-EU based owner) which does not cross the domestic selling threshold of 82,800 EUR obliged to register for VAT? 2. Is company registered in France (with Non-EU based owner) obliged to appoint a Fiscal Representative? 3. Could a French company not registered for VAT claim the input VAT paid during imports and the VAT paid on services received in France? 4. Can a French company not registered for VAT get an EORI number to import goods?

[@HeelanAssociates]

Hi Umer, Sorry this one is too detailed to answer here I’m afraid. We also couldn’t advise on the French taxation issues only UK.

[@ajsuk0]

Hey Dan, great resource, thank you! May I ask if there's a best Registration Date to choose if the business is trading but isn't yet profitable yet, and wants to claim back VAT on purchaes? (ie: Has already been making sales(obviously not charging VAT yet) but has made start-up purchases(paying vat))? TIA

[@HeelanAssociates]

Firstly I would ask myself (or seek help) to determine if VAT reg is going to help in overall picture, particularly if you are struggling with profits. For a lot of businesses it's actually a hit to profit to be VAT registered, so it's worth checking whether that's right for you in general. In terms of dates, it's too hard to say that without full details of the situation, apologies. In general terms though, VAT registration (presuming it's right for you) would mean VAT claims likely possible from the date you register and your first return thereafter.

[@MrZOMBIE170]

so if a self employed person makes less then £85,000 a year say for example they earned £15,000 they don't need to worry about charging for VAT to customers

[@HeelanAssociates]

It’s all based on turnover not profit. So for Uk based businesses if you don’t exceed 85,000 (of sales) in a rolling 12 month period, you don’t have to be vat registered.

[@thefatcrust206]

I operate in hot food so need to charge VAT on hot food when consumed on premise but not when mobile trading outdoors. f I VAT register, do I need to apply VAT to my outdoor sales as well as my indoor ones?

[@HeelanAssociates]

This depends a lot of what you are doing/supplying, oddly food VAT is one of the more difficult (specific) areas of VAT. Some help here: www.gov.uk/guidance/catering-takeaway-food-and-vat-notice-7091

[@MegaFred8888]

Year after year, i have to stand in front of retail customers to explain why there is vat on their invoice. Why must i be a unpaid tax collector having to put up with constant moaning.? Whoever thought of employing ,wage free tax collectors having to deal with customers and then , if not paying up the thought of imprisonment, deserves a medal. Who ever he was can he work for me .

[@HeelanAssociates]

Yes the cost of compliance is not insignificant, forgetting the pricing challenges, additional conversations etc.

[@nathanber4002]

I started a B2B business in October and I charged my client 20% VAT as I thought that VAT had to be paid and collected from the get go even without a VAT number…. What would be the best advice as what to do about that mistake to avoid legal issues?

[@HeelanAssociates]

Hard to say without full knowledge of situ, but one option maybe to refund the vat and re issue the invoice.

[@shandeepgurung3108]

I am importing medication for self use should i get a vat no for the parcel to be delivered . The company that i am ordering for is asking for vat no

[@HeelanAssociates]

It maybe for their own purposes to prove your are a business. You’d need to consider the other impacts of being vat registered. If you don’t want to be, ask them why they want it.

[@mahmudulhassankhan7383]

I'm not near threshold but got notice thru ebay uk (Im non-uk), so how can settle it?

[@HeelanAssociates]

Sorry we can't really answer this without more knowledge of your exact trading scenario.

[@smartwealth4484]

hi, if i start my new company and buy goods to resale from a vat registered business will i be able to claim the vat back for the amount i paid to supplier on the goods i bought

[@Ashley-pr5ch]

Hi there, if your company is VAT registered then you'll be able to recover the VAT :-)

[@HeelanAssociates]

What Ashley below said, *in most cases*. You have to be VAT registered to have a shot at recovering the VAT.

[@leknvisuals]

Hi so I have a trainer customisation business. I have to hit 85,000 yet but very close. all my products are £150 per pair for the shoes so here is the process. I go to adidas and pay £70 for the trainers. I pay VAT included in those shoes. I then use their shoes and customise them into designs and sell them for £150. how does VAT work for me and my business. I use £15 worth of products per pair.

[@HeelanAssociates]

So currently you make £150 - £70 - £15 = £65? If so, presuming VAT in on the trainers and the products, if you did nothing would be: £125-£58.33-£12.5 = £54.17, and you'd hand over £10.83 in VAT (£25 collected, less £11.67 incurred on the trainers, £2.5 incurred on the products)

[@outreachvideos8743]

Hi Dan, one of UK clients sells services to US. It happened that the sales went above 85000 pounds. Does the taxable supplies include the sales to US? So should we request our client to get registered

[@HeelanAssociates]

It depends on the ‘place of supply’ as to how the vat is treated. It may well be it doesn’t count towards the vat turnover figure, but check here www.gov.uk/guidance/vat-place-of-supply-of-services-notice-741a

[@outreachvideos8743]

@@HeelanAssociates Thank you. It would be B2B..would be zero rated supplies, but was wondering if this zero rated supplies would be included in the total taxable supplies to determine the threshold for VAT registration

[@mundaysappliancerepairs1065]

Hi :) so is it 85K real turnover in a 12 month period? We just did 10K in a month so we are definitely going to hit it. But can I wait until we literally turnover 85K with any 12 month period? So I have some time to think and plan…. We’ve been panicking all day thinking we HAVE to register this week lol

[@HeelanAssociates]

So yeah ONCE you exceed it in that month you need to act. So oddly you could say go over £85,000 with an invoice on 2/10/23, but you still don’t have to reg yet. You’d need to be reg’d 1/12/23 in most circumstances. (~30 days after the month you go over).

[@christynunns2484]

I'm in the process of VAT registering as a sole trader. My clients are now all VAT registered and I have high VATable expenses so it makes sense. However, I'm also about to incorporate a ltd co doing the same work, with a view to stop as a sole trader. Am I going to run into problems if I register for VAT as a sole trader, then incorporate the ltd co (and not vat register yet while I wait to back claim on past expenses as as sole trader), then after some delay, transfer the VAT no to the ltd co? Are there limits/rules about when I can transfer assets from the sole trader to the ltd co? Is there only an issue if I were to actually start trading as the ltd co (as that could be seen as VAT avoidance by having one biz registered and one not, doing the same work. Which isn't what I want obviously!) - so can I just register it to start getting paperwork etc sorted and not trade yet? (I know that if I transfer the assets to the co first, and register the ltd co for VAT I'd miss out on claiming on those historic expenses).

[@HeelanAssociates]

Hi Christy, I believe you've had this answered directly with us as it's too detailed to answer in a comment, but we wanted to leave a comment here for anyone digging through these. Lots going on here, but it's probably easiest to say that in order to recover the VAT incurred as a sole trader, you will likely want a Self employed VAT reg first regardless of what you do with the limited.

[@Alan-mi1lp]

So if I reach the VAT threshold in a 12 month period. Do I start adding VAT from that point going forward or am I liable to pay VAT on all sales prior to reaching the threshold?

[@HeelanAssociates]

VAT is (in most circumstances) added from when the date you register/is on your registration certificate, so going forward. If you are late registering, that's a diff story.

[@SamzehGFX]

@@HeelanAssociates This was also a question I had as I'm in a similar position - thanks for answering this!!

[@raxkumar]

I subcontract for wickes as a fitter on the cis scheme, and have realised I have been paying 20% vat and 20% cis tax. Is this because iam selling wickes a service? And how can any fitter work loosing 40% off each job surely there must be a way to claim this back?

[@HeelanAssociates]

Hi Rax, Firstly, love Wickes. Spent a great 5 years of my life there 😃 CIS tax is actually your money. So it goes to HMRC on account of tax you owe. Many people get a repayment as it’s often too much. The vat isn’t your money anyway, it’s a tax added on top of your money, so that can be ignored. This video might help on the cis kzbin.info/www/bejne/oXjNn6GBq9qXmZI One for the vat kzbin.info/www/bejne/bmPahp9tqN91hqs Kr D

[@alin-gaming4403]

Bro , you talk too fast.. sry but i can t understand nothing from you.

[@HeelanAssociates]

No probs. We write it all down www.heelanassociates.co.uk/should-your-business-be-vat-registered/

[@burkus4033]

That’s your problem. I understood perfectly.