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?
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.
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.