How to get good staff?

[adamangler]

The 12% relates to the fixed rate scheme, you have to charge your customers 20% but pay the VAT man turnover + 12% on your VAT return. On this scheme you can only claim the VAT back on items over £2k, I believe, so cant claim the VAT back on your diesel etc.

Ok ive not looked into it at all so dont really understand it, just know im headed in that direction, i shall have to check with my accountant

cheers

 

[Omega]

Can us window cleaners use the flat rate of 12% ?

I always thought we had to go on the full 20% rate

If so that would make a difference to deciding whether or not to breach the threshold

Yes. Providing you are not a limited costs business and your turnover is not over 180k inc Vat. 
 

its 12% of total sales.

if you adjust your prices to keep them the same and include the vat (Ie. £100 pre vat stays £100 for which 83.33 is the price and 16.67 is the 20% vat)

you only pay over 16.67% so it’s a 6.67% difference.

flat rate you only claim vat back for capital purchases over 2k I think  

as you get larger the costs increase for fuel and equipment so by the time you reclaim vat once duly registered the real world difference decreases from the 6.67% you know.

its inevitable.

ask an accountant to look into it for you and check the gov website. It talks you through step by step. Some of what I said may be slightly off as talking from memory. 

 

[Part Timer]

Ok ive not looked into it at all so dont really understand it, just know im headed in that direction, i shall have to check with my accountant

cheers

First year you get a 1% discount so pay back turnover + 11%. If you don't spend a lot of money on new equipment, travelling, advertising etc you will, in my experience, be better off on the fixed rate scheme. It is also an absolute doddle to do. Beware though if you go VAT registered you have to go digital. 

 

[adamangler]

First year you get a 1% discount so pay back turnover + 11%. If you don't spend a lot of money on new equipment, travelling, advertising etc you will, in my experience, be better off on the fixed rate scheme. It is also an absolute doddle to do. Beware though if you go VAT registered you have to go digital. 

What do you mean by you pay back turnover plus 11%? 

If i for example turned over 100k, would i pay £11k VAT? 

 

[Part Timer]

What do you mean by you pay back turnover plus 11%? 

If i for example turned over 100k, would i pay £11k VAT? 

If you turned over £10k a month your VAT liability would be £10k + £2k VAT x 12% so you would pay the VAT man £1440, a month. On your example you would pay £14440 but as VAT is usually done quarterly if you turned over more than £37k, in a quarter I don't think you can use the Fixed Rate Scheme.

First year you get 1% discount so you pay back 11% but it's best to do your calculations based on 12%