vat registered question

mukki

i set up a small home user computer support and training call out businness, plus i'm a total accounts nubie


i went to an account in november and he suggested not to get vat registered as home users would prefer not to pay the extra 21%

but he also said i dont need to unless i earn above 32k to get registered

my problem is that a lot of people ring me up looking for pc's, printers, pocket pc's, etc, and to save my customer time and hastle, i buy them myself, and add the price to my bill for setting it up/training, the pcs coming in at about €500-€1000.

i am worried that my earnings, + payment for the supplied parts will push me over the 32k forcing me to start adding the 21% and all the extra paperwork

Dabko

mukki wrote: »

i set up a small home user computer support and training call out businness, plus i'm a total accounts nubie


i went to an account in november and he suggested not to get vat registered as home users would prefer not to pay the extra 21%

but he also said i dont need to unless i earn above 32k to get registered

my problem is that a lot of people ring me up looking for pc's, printers, pocket pc's, etc, and to save my customer time and hastle, i buy them myself, and add the price to my bill for setting it up/training, the pcs coming in at about €500-€1000.

i am worried that my earnings, + payment for the supplied parts will push me over the 32k forcing me to start adding the 21% and all the extra paperwork

Mukki,

I would recommend registering for vat. You will have a little extra paper work to do, but as long as you keep all your purchase/sales invoices in check, you'll be grand. The " + payment for the supplied parts " is technically turnover.

As you are now selling computers/computer components, you will benefit greatly buying goods abroad. With an Irish vat number, you can offset all vat due in the country of origin, hence improving you cash flow here. Just remember to give them your vat number when placing orders, as claiming vat back from abroad is a pain in the rectum.


And, believe it or not, people expect to pay vat! My company advertises retail prices, inclusive of vat, however, every second customer assumes there is vat due! Might see if i can get away with it!:rolleyes:

cormie

You'd only have to pay 13.5% on the setting up/training I think as it's the service rate.

information

Dabko wrote: »

Mukki,

I would recommend registering for vat.

If you register for VAT you will have to increase your prices by about 17% to make the same profit that you make now.

mukki

information wrote: »

If you register for VAT you will have to increase your prices by about 17% to make the same profit that you make now.

thanks for the heads up, wow, i'd hate to hit the customers with that




would a sole trader ever be forced to register for VAT?

The CCAinsider

A bit more complex than you think.

Training is VAT exempt
Set up is probably 13.5%
Supply of goods will be 21%
You also have rules where you supply a bundled service and supply.

You will have to open negotiations with the revenue to get a % agreed for your input credit. As some of your supplies are VAT exempt, not all of your inputs will be allowed.

If you are selling to VAT registered businesses they will be able to claim back the VAT you charge, it is only where you are selling to Joe Public that the cost is passed on.

Financial Reporting standard 5, Application note G states that were you are an agent for somebody you record the net commission as your turnover.

Once you reach the turnover limit you MUST register for VAT and if you don’t, expect a visit from Revenue and a large bill with interest and penalties added on. You can not claim input credit in the period when you were not registered so if you expect to exceed the limits register now rather than wait.

Well done for starting the business, it is just a pity that our tax system does not support you and make it easy to do business. You really need an accountant.