That would be ideal actualy, if the customer bought the materials from the supplier & I got a commission on the deal. It would solve the VAT threshold problem & I wouldn't have to tie up my money. Alas I don't know of any supplier that operates such a scheme.
On a few occassions the client has bought the materials but is unable to transport them, so I go & pick them up.
Either you live close to the work or have to travel there. Both have to be paid for somehow. As has parking and CG for your van.
Turnover including wages actually. BUT if the 'customer' buys all the=20 materials, labour is all there is..by and large.
So if my income as a freelance exceeded 68k - very unlikely with TV as it is at the moment ;-( - I'd *have* to become VAT registered? Some of my colleagues are - but through choice. Mainly because they hire equipment.
Broadly, yes.
It'd be pretty well painless for you if you were basically just selling yourself (so as to speak) and even more so if you opted for a flat rate scheme. But as usual if the day comes it'd be a good idea to talk to others in your line of work who are registered (or of course a *good* accountant, or even believe-it-or-not HMRC).
I'm not sure that as a sole trader/self employed you aren't VAT exempt=20 at whatever level you trade at..its only when you seek the shelter=20 offered by a limited company... I think.
The Natural Philosopher gurgled happily, sounding much like they were saying:
Nope. The VAT threshold is exactly the same for all traders, regardless of legal status.
Nope, either as an individual, partnership, company or club, you have to register when you exceed, or expect to exceed £67K
And presumably you charge for the time spent doing so. (Not really a question. Just an observation.)
And working in the still relatively prosperous South-East rather than Murkeyside isn't?
Maybe location is the key. I think he is in Liverpool which doesn't really seem to have recovered from the 80s recession and is probably suffering from this one rather more than the (relatively) wealthy south east.
Bill
When I was self employed I looked at it - but because I was basically selling a service (my knowledge and troubleshooting skills) not physical goods, it didn't seem to be worth it. Was I wrong?
If you're buying lots of stuff (eg computers to do your work on), it can be worth it because that stuff effectively becomes 15% cheaper to you.
If you're selling to the general public or to certain organisations (housing associations are one, possibly universities, stuff like that), there's an advantage to not being registered, since your prices are effectively 15% lower (or you have the same price but take home more, works either way :-) )
I'd guess you were probably right not to bother.
It was 95% domestic customers, and 95% service-only, not goods.
And turnover was way, way under the VAT threshold - which is why I went back to having a 'proper job'.
Too conscientious to do half a job, and too soft to charge a rate I could live on. That's me.
Depends where it is TBH. If I can do it when passing, which I often can then I don't charge. If I have to make a special trip say to IKEA then I do charge.
Which is a dis incentive to expand. I have a semi retired mate, very competant DIYer, great with people, looking for 3 or 4 days work a week. I could easily increase the advertising & find enough work for both of us, but I'd hit the VAT threshold.
Then I'd either have to reduce prices to absorb the VAT, or charge 15% more & lose business.
How much of your business is individuals and how much for companies? (you seem to have mentioned several company jobs here) the VAT would not be seen as price hike to the companies as they would claim it back.
...With higher property prices, higher council tax, food prices etc.
There are plenty of poor areas in the south east.
You would be able to claim back your VAT on materials (admittedly that is likely to be much lower that your output VAT)
Alternatively you can choose one of the "flat rate schemes" where you charge VAT on all sales at 15% to your customers, but only pay e.g. 12% VAT to the tax man instead of claiming back VAT on your purchases).
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