Vat registration looms

In some cases e.g. public sector require you to be VAT registered why I don't know but I don't think it's got anything to do with professionalism.

We are VAT registered and always have been due to the fact that we do work for the local council. However as far as private work is concerned I'd rather not be especially since the downturn of the building trade and the upturn of landscape companies. It's true to say that you can reclaim but you've got to get the job first and when we add VAT on then the people going for the cheapest quote ( and there are a lot about)are going to go to the non registered person.
We have looked at the different advice given in earlier threads but wage bill alone won't let us de register.
If councils aren't spending any money might think about Phil's suggestion and split into two companies ;)
Keith Barker said:

I've never encountered a client or potential client who saw us as less professional because we weren't VAT registered. In fact the only place I've ever encountered an issue with it is here! But we deal almost exclusively B2C, where VAT is just an additional 17.5% on the bill.

Replies

Bigyin June 26, 2010 at 3:32pm

No way around increasing you prices if you want to retain the same margins. Might be time to have a really hard look at your costs to make sure you're being as efficient as possible. A bit of shaving here and there could mean you could minimise your price increase to below the 17.5%. Also, prepare for the 20% rate in January. The only positive aspect is that you can claim back the VAT on your purchases.
Fenlandphil June 26, 2010 at 4:16pm

As Bigyin says you do get back the VAT on your purchases to offset against your charge out VAT, it's so long ago since we registered I can't remember all the wrinkles. A chat with your accountant would be a good idea' that's what I would do.
Keith Barker June 26, 2010 at 7:21pm

I've never encountered a client or potential client who saw us as less professional because we weren't VAT registered. In fact the only place I've ever encountered an issue with it is here! But we deal almost exclusively B2C, where VAT is just an additional 17.5% on the bill.
Fenlandphil June 26, 2010 at 7:26pm

If you really don't want to register for VAT, one alternative you have is to split your business in two and trade as two different companies.
vhowe June 26, 2010 at 10:22pm

In some cases e.g. public sector require you to be VAT registered why I don't know but I don't think it's got anything to do with professionalism.

We are VAT registered and always have been due to the fact that we do work for the local council. However as far as private work is concerned I'd rather not be especially since the downturn of the building trade and the upturn of landscape companies. It's true to say that you can reclaim but you've got to get the job first and when we add VAT on then the people going for the cheapest quote ( and there are a lot about)are going to go to the non registered person.
We have looked at the different advice given in earlier threads but wage bill alone won't let us de register.
If councils aren't spending any money might think about Phil's suggestion and split into two companies ;)
Keith Barker said:
I've never encountered a client or potential client who saw us as less professional because we weren't VAT registered. In fact the only place I've ever encountered an issue with it is here! But we deal almost exclusively B2C, where VAT is just an additional 17.5% on the bill.