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  matt evans April 5, 2014 at 9:43am

  Im chasing the commercial market currently bouncing off the vat limit to so wont affect me if we do become vat registered. Yes pain the ass waiting on invoices but to me arguing over a tenner with some old geezer about how little he should be charged is a bigger pain!!
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  Ed Fairman April 5, 2014 at 10:26am

  Hi Gareth good to see youre doing well. Just my opinion but don't worry about vat, your customers already pay it on any materials used.

  Perhaps you need to find some bigger projects to support the next step into the world of Vat?
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  Gareth Leek April 5, 2014 at 11:16am

  Matt. Once In a blue moon has that happened to me. Its 30% deposit and payment in full on completion, never a problem. Rather that than be chasing cash flow crunching invoices for weeks.
  But each to their own I suppose.
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  Gareth Leek April 5, 2014 at 11:24am

  Hi Ed. Thanks for the reply.
  I have considered that a few times, but with the average job at about 2800 and a lot over the 6k it adds a huge amount. Maybe too much when most domestic competition is not registered its also extra paperwork that I can barely find the time for. An unpaid vat collector is not my idea of time well spent.
  Sorry to sound so negative but im feeling very constrained at present lol
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  Colin Hunt April 5, 2014 at 12:36pm

  Well Gareth, you are where you are because you are good at your job - and price competitively.
  So you have 2 choices - expand or don't expand! I was where you are 25 years ago, 2 men chasing from job to job with hardly time to breathe. Tried subbing - hated it, didn't feel in control, too many corners cut. In the end we took on a school leaver, no experience, best thing we ever did. There is so much work we do that is unskilled that they can do to take the load off you. Don't over pay to start, pay minimum wage, it doesn't hurt too much, gives you room to maneuver and to someone used to earning nothing, it's a small fortune and a step on the working ladder. They will learn and so will you learn to deal with employees and how to run a business. Back then the lads didn’t last too long, a year maybe then off into the big wide world.
  We eventually settled down to 4 full timers plus 1 part time from now until Autumn and now concentrate on maintenance. Yes there is more ‘office’ work, but that’s all part of it.
  You mustn’t worry about the VAT side, I assume you are a hard landscaper where the labour/materials split is around 50/50, so your prices will only be 10% higher than a non registered contractor. Also don’t forget that your labour costs could be lower. Go for it, work smart, move onward and you won’t regret it..............or stand still!
• PRO

  Gary RK April 5, 2014 at 12:57pm

  I can only echo that advice from Colin. Worth it's weight in gold from people that have been there and done it. We are also looking for anther apprentice to join us, in some ways similar to described above
  
  I can't stress enough these common misconceptions about;
  - VAT Registration and being '20%' dearer
  - Commercial works (whether soft, hard or maint). if you are smart once you are in to the payment cycle, very little chasing of invoices, few arguments or disputes and constant +ve cash-flow if you don't financially over extend yourself
  - Perception of size and ability is linked to many factors, VAT included - whether you like it or not.
  
  Colin Hunt said:

  Well Gareth, you are where you are because you are good at your job - and price competitively.
  So you have 2 choices - expand or don't expand! I was where you are 25 years ago, 2 men chasing from job to job with hardly time to breathe. Tried subbing - hated it, didn't feel in control, too many corners cut. In the end we took on a school leaver, no experience, best thing we ever did. There is so much work we do that is unskilled that they can do to take the load off you. Don't over pay to start, pay minimum wage, it doesn't hurt too much, gives you room to maneuver and to someone used to earning nothing, it's a small fortune and a step on the working ladder. They will learn and so will you learn to deal with employees and how to run a business. Back then the lads didn’t last too long, a year maybe then off into the big wide world.
  We eventually settled down to 4 full timers plus 1 part time from now until Autumn and now concentrate on maintenance. Yes there is more ‘office’ work, but that’s all part of it.
  You mustn’t worry about the VAT side, I assume you are a hard landscaper where the labour/materials split is around 50/50, so your prices will only be 10% higher than a non registered contractor. Also don’t forget that your labour costs could be lower. Go for it, work smart, move onward and you won’t regret it..............or stand still!
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  Gareth Leek April 5, 2014 at 2:19pm

  Colin
  I really appreciate your reply and the great advice offered. I do feel like you have definitely turned a light on.
  Watch this space.
  Thanks again
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  mark harris April 5, 2014 at 3:58pm

  i've been VAT registered since 97, as a sole trader with help if and when, mainly domestic market, i woulod not have it any other way, customer should pay the vat . all price quoted from merchant are +VAT,so let the customer pay the VAT,
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  Gareth Leek April 5, 2014 at 5:14pm

  This is where iam getting confused. My accountant keeps advising me to not be vat registered. She says that vat is charged on the entire bill and not just the labour. When I said that means that the customer is paying vat twice she told me thats correct.
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  mark harris April 5, 2014 at 5:33pm

  how can the customer be charged twice,
  you buy the materials + vat which is reclaimable
  you charge vat on total bill, the labour element is what the vat man gets which you pay the vat man.

  you charge vat onto the invoice cost for argument sake,, £2000+vat =£2400,
  end of vat period you pay vat man the non reclaimble amount,
  so if job had £1000+vat material you reclaim £200 and he has the difference
  being vat registered you are not subsidising the vat on material unless you add it into your costs at the moment.

  but in the end its your choice, but be aware vat figures for being registered are calculated in a 12 month period not a tax year