VAT registered........

[Ginger Tom]

Essentially, should I become vat registered now I'm starting up my own company, obviously it means I can get cheaper fuel as I can claim the vat back on that but what do I do when I sell my time to do work, on their cars before you start Rob?

Has anyone done it and what were the benifits and shortfalls of it?

 

[Sparx]

I was under the impression you don't need to be VAT registered until you're earning a certain amount over the course of the year.
I could put you in touch with a friend who's got his own business and all VAT registered if you can't get the info you need

 

[XIIVVX]

I am VAT registered, (In truth, I should say 'my company is VAT registered' since it and I are separate entities) but it is far from simple to say that claiming back your fuel VAT will save you money

To do so you will become liable to be taxed for 'benefit-in-kind' which will cost you as much, or more, than you will save by the 16/17% reduction in your fuel bill.

On advice from my accountant I run the car privately and then claim mileage against the business and have done for the last twelve years, both as part of a partnership, and now, running a Limited Company.

Once registered you will need to charge your customers VAT on top of your normal charges, which could make you 20% more expensive than a non-registered competitor, reducing the volume of your business.

But a car forum isn't the best place to seek advice on taxation - I'd recommend you find yourself a good accountant at the very start so the business is set up correctly from Day One. It will save you a lot of hassle, and money, in the long run

 

[evilrob]

Mrs Evil works for HMRC - she reckons the general consensus is that it's more hassle than it's worth if you're turning over less than 50k, and you're not obliged to register for VAT until you're turning over 77k.

That said, it's always best to seek the advice of a reputable accountant as it may be that being VAT registered is perfect for your operation.

 

[yippeekiay]

I run the car privately and then claim mileage against the business and have done for the last twelve years.

Exactly how I did/do it, much simpler way all round. Simply claim 40p per mile as business expenses up to the first 10,000 miles of business use per year then 25p per mile thereafter.

 

[XIIVVX]

45p :grin:

It went up

 

[yippeekiay]

:shock: Bloody hell, that makes a change. About time it was increased. Shows how long it is since I did anything :lol:

 

[XIIVVX]

I have taken something like £6,500 in mileage expenses out of the company this year, most of it earned by the £600 e-Bay pick-up :grin:

 

[yippeekiay]

:shock: That's a lot in a year!!. I didn't do much travelling being based at home doing CAD work but just checked the old Puma cost spreadsheet (yes I'm that anal :lol and it shows I got £7140 in mileage allowances in the 4 years I owned it so it paid for itself several times over too as all that was paid by my clients :lol:

Actually, most of that was in year 2010-11 when I claimed for 12665 miles. :shock: