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Flat Rate VAT Scheme Rate 1010 Responses
Last post: 4 months ago | Thread started: Jul 23, 08, 7:54 a.m.
- mimeartist
Here is a question for any business owners here... I'm due to be registered for VAT next month, but I want to apply for the Flat Rate scheme, however you have to pick out what your business mainly is? I design and build websites... but is that advertising (9.5%) or is that Computer and IT consultancy (13.5%)? Anyone here that does the same sort of stuff could you tell me what you chose and what rate it is?
- Jul 23, 08, 7:54 a.m. – Permalink
- johnnnnyh
I think you're more likely to be Computer and IT consultancy. We didn't bother with the flat rate - the numbers didn't add up. You could ring the VAT office they're usually helpful. When we registed the business with companies house we were listed as computer related and other activities. Guess that doesn't help you a lot but just my thoughts on what it's most likely to be.
- Dog-earJul 23, 08, 7:58 a.m. – Permalink
- Spookytim
Clearly Mime, that is advertising... why would you opt for the higher repayment rate?
Its a matter of interpretation. Websites are the medium, not the message, so go with advertising and enjoy the windfall.
I assume you already know about the ups and downs of the flat rate scheme.
- Dog-earJul 23, 08, 7:58 a.m. – Permalink
- mimeartist
thanks lads,
yeah my accountant/agent wants me to be flat rate as it is less work for me... plus i've got all the kit i now need so i won't have many outgoings for the next year or so... and i can't be doing with doing all that credit/debit stuff to work out what i owe every 3 months...
All i do know is that any VAT I charge is going in a separate account so I've always got it safe.
- Dog-earJul 23, 08, 8:01 a.m. – Permalink
- johnnnnyh
You may well be able to claim the VAT back for the things you've already bought. We were able to before we'd even sent an invoice - so that VAt office paid us a lump sum to begin with.
I really think talking to them is correct since ultimately it's their decision and not yours and if you've nothing to hide there's no reason not to call them. If you think you're advertising and they think your computers - then I'm afraid you're computers! As long as you know what you're doing and are not trying to defraud them then they are the best people to contact for this kind of advice. Although your accountant should probably know the answer too.- Dog-earJul 23, 08, 8:08 a.m. – Permalink
- mimeartist
cheers, how is business down in Cornwall? I might move back to Devon one day
- Dog-earJul 23, 08, 8:10 a.m. – Permalink
- Spookytim
The Revenue are tough on lateness for VAT payments but they do give you one chance of fucking up before they get the guns out.
I had a HORRIBLE vat experience when I was setting up Studiospooky. I had sailed massively past the VAt threshold as a sole trader with my studio in London. I knew I had, but I assumed when you went over it, you just had to casually let them know so that in your next financial year you started charging and paying VAT.
Oh no. Once you've gone over it, ever single penny has to be VAT deducted at 17.5%. I had dissolved my design studio partnership and becuase that was a casual arrangement not on paper at all, I had invoiced my ex-partner for my 50% of the business... with no VAT included becuase I wasn't VAT registered at the time. Plus I'd invoiced god knows how much to various clients.
So I owed the VAT man about 50k in VAT payments for invoices that I hadn't charged any VAT on. They don't give a shit. Total hard-nosed players. They are owed, and they will collect whether or not I charged VAT on my invoices.
I had to write to all those clients and my ex-partner and practiucally BEG them to accept and additional VAT payment demand on invoices that had been settled months back.
God bless every single one of them becuase they all paid me the additional payments and I ended up in the clear. But any one of them could have said no and I'd have been stumped as it was totally at their discretion to do it. My ex-partner paid me about 20k in VAT demands voluntarily and he could very easily have left me stranded if he wanted to. I have never been so happy that our partnership didn't end accrimoniously.
They all just claimed my VAT claim back in their next VAT return so it wasn't like they would be out of pocket.
VAT is mental. Its just passing money round on behalf of the treasury.
Another of my long and boring anecdotes. I am sorry about them. I know how dull they are, but its good therapy for me.
:)
- Dog-earJul 23, 08, 8:15 a.m. – Permalink
- mimeartist
yeah i'm close to going over but did it online so am registered on 1st August would like to get the flat rate thing sorted at the same time so it is all clear from then on
- Dog-earJul 23, 08, 8:18 a.m. – Permalink
- johnnnnyh
Business in Cornwall is fine-ish. The sun is out and there are boats bobbing up and down on the river. Not a load of work around but hey it is summer.
Agree with Spooky that VAT are hardnosed BUT as long as you're on top of it, you shouldn't need to worry. It's extra admin, for sure, but no more than doing the accounts anyway.
It is just passing money around though if all your clients are VAT registered. Nevertheless I like buying things and subtracting the VAt and thinking I got it cheaper.
- Dog-earJul 23, 08, 8:20 a.m. – Permalink
- Spookytim
As soon as you know you are going over, caveat your invoices with a VAT demand plus your accountant's details for verification if you haven't got your VAT number yet. I seemt o recall they take quite a while to provide your VAT number but I could be getting mixed up with passports!
- Dog-earJul 23, 08, 8:21 a.m. – Permalink
- mimeartist
i've got my number though already thank goodness
- Dog-earJul 23, 08, 8:23 a.m. – Permalink
