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Just FYI, when you do need to register for VAT make sure you check out the benefits of Flat VAT, for us it was significantly more economical then regular VAT re

Just FYI, when you do need to register for VAT make sure you check out the benefits of Flat VAT, for us it was significantly more economical then regular VAT registration. I'm constantly surprised how many accountants don't seem to even make their clients aware of this option.

SmellyGeekBoy 11y ago
Thanks for the advice. I was pretty close to the threshold last year and it's looking likely I'll have to register this year so I'll certainly look into it. I'm actually between accountants at the moment, although HMRC's own PAYE RTI app at least makes that side of things ridiculously easy for me. I certainly wasn't looking forward to dealing with VAT on my own.
- phillc73 11y ago
  When I started my UK Limited company I immediately registered for VAT, so I could claim VAT paid on purchased startup equipment, which was mostly computing goods. I could then obviously offset that against VAT collected in the first months of business. I quickly discovered that quarterly VAT returns were a pain, and accountants aren't cheap (for some definition of cheap). I am also just a one man band at the moment, and de-registered for VAT about a year ago. Unless there are significant savings to be made, or you're over the £82k per annum revenue threshold, factor in the cost of the effort to submit these returns. They really are just a distraction from the main focus of your startup business.
  - surreal 11y ago
    Have you looked into accounting software? Like you, I de-registered for VAT for a while, but since using FreeAgent I've re-registered and haven't looked back. VAT returns are now just a click each quarter (plus the minimal clicks to upload and explain my bank transactions periodically). VAT nuances (VAT on reclaimed mileage, reverse charges, etc) are taken care of automatically too. Not to mention all the other time savings (expense receipts uploaded straight from smartphone, tax return & accounts now only take 5-10 mins at end of year using the reports FreeAgent generates, etc etc etc). I'm not affiliated with FreeAgent (other than my referral code 44gf6bbt, which would give both parties 10% off for life). Just an incredibly satisfied customer; it was by far the best of the 3 or 4 tools I trialled.
  - SmellyGeekBoy 11y ago
    I was told not to register by my old accountant, it was one of the few pieces of good advice he gave me. ;) I know of a few contractors who registered so they could claim back 20% on a new TV, new iPhone, top of the range gaming PC... Perhaps I'm just too honest but I already had everything I needed (a high end laptop) and didn't like the thought of the extra hassle. Not just the day-to-day bookkeeping side of things (I use Sage anyway) but keeping up with the changes in allowances and thresholds and remembering to submit the quarterly returns. I'd rather just get on with my job!
- boothead 11y ago
  Freeagent also deals quite nicely with VAT, and you can set up for automatic direct debit... In fact I sometimes wonder what I'm paying my accountant > £100/month for :-)
  - surreal 11y ago
    Many a true word spoken in jest! It depends on the specifics of your company of course, but between FreeAgent, HMRC's free filing software[0], and a very mild interest in accounting, I've yet to find an accountant that could give me a positive ROI. [0] https://www.gov.uk/guidance/corporation-tax-use-hmrcs-free-filing-software https://www.gov.uk/guidance/corporation-tax-use-hmrcs-free-f...
  - SmellyGeekBoy 11y ago
    First I've heard of FreeAgent. I've had Xero recommended to me by others in the same boat, and I personally use Wave just for invoicing (as it doesn't cost me anything and at least help me keep track of whether I've been paid).

SmellyGeekBoy 11y ago

Thanks for the advice. I was pretty close to the threshold last year and it's looking likely I'll have to register this year so I'll certainly look into it. I'm actually between accountants at the moment, although HMRC's own PAYE RTI app at least makes that side of things ridiculously easy for me. I certainly wasn't looking forward to dealing with VAT on my own.

phillc73 11y ago
When I started my UK Limited company I immediately registered for VAT, so I could claim VAT paid on purchased startup equipment, which was mostly computing goods. I could then obviously offset that against VAT collected in the first months of business. I quickly discovered that quarterly VAT returns were a pain, and accountants aren't cheap (for some definition of cheap). I am also just a one man band at the moment, and de-registered for VAT about a year ago. Unless there are significant savings to be made, or you're over the £82k per annum revenue threshold, factor in the cost of the effort to submit these returns. They really are just a distraction from the main focus of your startup business.
- surreal 11y ago
  Have you looked into accounting software? Like you, I de-registered for VAT for a while, but since using FreeAgent I've re-registered and haven't looked back. VAT returns are now just a click each quarter (plus the minimal clicks to upload and explain my bank transactions periodically). VAT nuances (VAT on reclaimed mileage, reverse charges, etc) are taken care of automatically too. Not to mention all the other time savings (expense receipts uploaded straight from smartphone, tax return & accounts now only take 5-10 mins at end of year using the reports FreeAgent generates, etc etc etc). I'm not affiliated with FreeAgent (other than my referral code 44gf6bbt, which would give both parties 10% off for life). Just an incredibly satisfied customer; it was by far the best of the 3 or 4 tools I trialled.
- SmellyGeekBoy 11y ago
  I was told not to register by my old accountant, it was one of the few pieces of good advice he gave me. ;) I know of a few contractors who registered so they could claim back 20% on a new TV, new iPhone, top of the range gaming PC... Perhaps I'm just too honest but I already had everything I needed (a high end laptop) and didn't like the thought of the extra hassle. Not just the day-to-day bookkeeping side of things (I use Sage anyway) but keeping up with the changes in allowances and thresholds and remembering to submit the quarterly returns. I'd rather just get on with my job!
boothead 11y ago
Freeagent also deals quite nicely with VAT, and you can set up for automatic direct debit... In fact I sometimes wonder what I'm paying my accountant > £100/month for :-)
- surreal 11y ago
  Many a true word spoken in jest! It depends on the specifics of your company of course, but between FreeAgent, HMRC's free filing software[0], and a very mild interest in accounting, I've yet to find an accountant that could give me a positive ROI. [0] https://www.gov.uk/guidance/corporation-tax-use-hmrcs-free-filing-software https://www.gov.uk/guidance/corporation-tax-use-hmrcs-free-f...
- SmellyGeekBoy 11y ago
  First I've heard of FreeAgent. I've had Xero recommended to me by others in the same boat, and I personally use Wave just for invoicing (as it doesn't cost me anything and at least help me keep track of whether I've been paid).