Vat or not vat. That is the question

[John Gregson]

I deregistered but was nowhere near the threshold. If you are over you have to be registered, if under, its up to you.

Cheers John

[Gary Hoyles]

I started out VAT registered, but found it just cost me profit in the end.

[Mike Grant]

I was VAT registered but now work is so shy most of my customers are not VAT registered so saves me being asked to drop the VAT and then the long story that goes with it. You may loose out on bigger jobs where the buying in of materials can kill a job as you have to add the VAT into your price. You win some, you lose some! (chat.)

[Martin Pearson]

Think it depends on the type of customers you have as well as the legal implications if your over the threshold.
Like some of the others when I started out I registered for VAT, although I was below the threshold I did some work for quite big companies who expected me to be registered.
Now I only work part time most of the customers I have are small businesses & a lot of them are not registered themselves so I don’t see the need for me to be registered.

[James Haseldine]

quote Mark A Brown:

I am currently vat registered but thinking of de registering as hardly any one wants to pay the extra 20% any more. Plus I’m thinking of moving to a new workshop where the landlord doesn’t charge vat.

I don’t think anyone wants to pay 20% extra :D. As your prospective landlord doesn’t charge vat, whether you’re registered or not wouldn’t make a difference as the price he charges will be what you’ll pay.

I agree with Martin and, legal thresholds aside, would say it depends on your client base. If your biggest income comes from small businesses/private individuals who are typically not VAT registered, I’d say it makes sense that you’re not. If you are registered, you’ll either work out to be – a) a more expensive option than someone who isn’t, or b) if you try to compete on price, the VAT will come out of your profit margin which means less money in your back pocket.

If you deal mainly with larger businesses that are typically registered, then being VAT registered has its advantage – both you (materials) and they (final price) will claim back the VAT portion which may ultimately make you cheaper than someone non-registered.

Personally I’m not registered. I deal mainly with small businesses/private individuals so isn’t worth it for me.

Also, don’t forget to weigh up the additional costs associated with being registered – extra record keeping, quarterly returns, your time dealing with all this when you could be out earning.

If unsure, a good quick read here could be useful: http://www.sage.co.uk/blog/index.php/20 … r-for-vat/

[Stuart Miller]

I’m registered and although nowhere near the threshold find it advantageous.
As others have said it depends a bit on your customer base..
But even if you are not registered then you have to take into account in your prices that you are paying it on all your material so you are not automatically 20% cheaper, you are only cheaper on your own labour part.
i like being forced to do my accounts every 3 months and it keeps me in check for very little extra work.
A great deal of my work is Business to Business so they like it as they can claim the VAT back.
One of my main sources of claiming VAT back is on my fuel as most of my driving is business related so to get nearly all my fuel costs 20% off is a great bonus !!

[Colin Crabb]

Agree with Stuart above – has some nice advantages at the expense of more paper work.

I had to go VAT reg’ due to turnover – But this also allowed me to reclaim VAT on 2 new printers and a van – not ‘alf bad return.

Also if you have a foot in the traditional print market its worth remembering that some items are zero rated (eg leaflets) but the materials are standard rated (ink, Paper).

[David Hammond]

We’re registered, have been from day 1.

We deal mainly with B2B and trade sales, so it’s no problem, and if a customer doesn’t want to pay VAT we remind them it isn’t optional.

It a case of weighing up what you’ll pay VAT on ie: advertising, stationery, web hosting, fuel, electric etc.

We run clarity and sage so quarterly returns aren’t an issue.