To VAT register or not to VAT register

Accounting
1

As a small business, we don’t actually exceed the vat limit, but would like others opinions on this.

I understand you can voluntarily register for VAT - but is this recommended?

The way I’m seeing it at the moment (which could be completely wrong) is if I’m VAT registered, it suddenly makes me a lot cheaper for our clients who are also registered, in the way that the whole VAT on our stock is effectively passed on.

Have i got the right understanding of this? What do others think of voluntarily registering?

2

If you are B2c then wait till you have to vat register, if you are B2B then it makes sense to register now

3

I voluntarily registered around 8 years ago as most of my customers were commercial/business customers so I was instantly cheaper and I also invest heavily in plant and equipment so there are a lot of benefits there if you are VAT registered.

If I was just issuing invoices to customers in the private sector and didn’t really bother buying any tools ever then I wouldn’t even consider it.

4

I can certainly see the advantages. Majority of my clients are commercial, with only a few being small sole traders and not VAT registered.

Is it easy enough to account for and sort out? I just don’t want to register and end up it costing more than what it’s worth

5

The other reason I went VAT registered was that I had subcontractors working for me who were registered so I was losing VAT on that front as I had to pay the VAT inclusive amount to them but couldn’t claim the VAT back.

It’s a lot easier and simpler if you use a decent accounts/bookkeeping package, say Quickfile for instance!

As for costs, pretty sure it costs me the same to have accounts prepared either way.

6

If you dont have much vat to reclaim on your expenses / inputs then flat rate scheme can save you more money as well

7

It is worth looking at yearly VAT to take the stress out of quarterly declaration, you then have 2 months at the end to declare.