Setting up a dj business, vat question

larrylamp

I am planning on starting up a dj business soon..i am wondering what i have to do after i registra...and more importantly how do i claim back vat on the equipment i need to buy? thanks

dbran

Hi Larry

You should keep a record of all your receipts and write them up on excel. When you register for VAT the revenue will send you out a VAT return for you to fill in every 2 months called a VAT 3. You fill in the VAT on your sales, the VAT on your purchases and take one from the other. Thats it!

Kind Regards


Dbran

balducci

hi Larry,

When you say DJ business, what exactly do you mean? If you are going out on your own as a DJ for hire you are in the realm of a sole trader. A sole trader doesn't need to register for VAT until they are earning above €37500. If you register for VAT in order to get back a few hundred on equipment and then end up paying 21% of all your earnings back to revenue you will end up losing a lot more than you gain.

larrylamp

i see, say for instance i buy a heap load of equipment and get no business can i claim back the vat for the equipment and also advertising? im just trying to understand the risks and benifits...which im trying to off the state sites but there a little hard to understand...thanks in advance

balducci

I wouldn't recommend you register for VAT for that reason tbh. On a separate note - if you are setting up and planning on buying a heap load of equipment then buy 2nd hand - it will lessen your risk and will mean if you have to resell you'll get a much bigger chunk of your money back. It will also mean you can avoid registering for VAT until you're earning over the threshold. Go on to adverts.ie, there is loads of equipment on sale there. One of the big mistakes start-ups make is spending unnecessary amounts of money on the initial start-up and leaving themselves with lots of repayments.

91011

as with balducci - start with 2nd hand and see how the business does. The extra work involved in beng VAT registered is not worth it for a few initial euro. Plus then you will have to charge your customer vat too.

If you're targeting private parties etc, these customers won't be vat registered and you end up being 21% more expensive than a competitor.

Another option - if you buy the equipment on lease then the payments while you are unregistered cannot be claimed back, but if you register after a year all payments after that can have the vat claimed back.

bigneacy

very true.. no point pouring loadsa cash into before you know it'll work. Look at the internet classifieds and see what you can get (if the classifieds are full of 2nd hand DJ equipment, that should be fair warning to you though)

tomED

VAT returns aren't difficult to do, they're quite simple.

If I was you, I'd ask myself the question first "Do I see myself making over €37k in the first year?" If you do, you might aswell register for VAT now IMO.

However, this may put you at a disadvantage with your competitors as you will have to charge VAT. So if you need to earn €200 per gig, your price will be €242, someone who's not registered for vat can charge €200. To a business that is already registered for VAT, this won't be a problem. But let's say you are asked to do DJ at a wedding for example, you might be undercut by someone who isn't registered for VAT.

On that note, I wish you great success with your new venture!

chamaid

No need to register for VAT unless you make serious money. You get to write all the gear off as an expense anyway. So it will reduce your tax liability but you just have to wait longer to benefit from it.

questionmark?

I know others will disagree with me but just do what most dj's do take cash in hand especially if your only doing one or two gigs a week or even less. I know i know pay taxes its only right but the reality is find 100 djs around the state and see how many are paying vat.

Buford T Justice

questionmark? wrote: »

I know others will disagree with me but just do what most dj's do take cash in hand especially if your only doing one or two gigs a week or even less. I know i know pay taxes its only right but the reality is find 100 djs around the state and see how many are paying vat.

Yeah, but why would someone register for vat when their bi monthly returns are not showing any activity. Cash in hand is one thing, but you can't operate all the time this way if you are vat registered