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Hello Guys,

I was wondering if any of you could help,

I have taken a side step from my old company (partnership) and I am opening a new ltd business. 

I will have both residential and commercial ltd entities. 

I wanted to know, if you go vat registered, did you just start charging exsisting customers vat? If so, how easy was this?? Did you get many customers dropping off? I know for my commercial side it's not a problem. 

Just apprehensive this may put my existing clients off. 😞

Any tips and feedback would be appreciated.

Many thanks 

 

 

 

 

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10 hours ago, DCDom said:

Hello Guys,

I was wondering if any of you could help,

I have taken a side step from my old company (partnership) and I am opening a new ltd business. 

I will have both residential and commercial ltd entities. 

I wanted to know, if you go vat registered, did you just start charging exsisting customers vat? If so, how easy was this?? Did you get many customers dropping off? I know for my commercial side it's not a problem. 

Just apprehensive this may put my existing clients off. 😞

Any tips and feedback would be appreciated.

Many thanks 

 

 

 

 

Hi there.

not sure how much you know on vat so I’ll try to answer based on what I understand. Apologies if it’s covering basics.

you can register for vat whenever. You have to once your projected sales are going to pass 85k on a rolling 1 year basis.

depending on your costs you can either pay over 20% of sales

or

pay over a simplified rate of around 12% for our industry if you meet certain cost criteria.

first year is 1% discount.

whether your clients will like it will depend on your client demographics whether they are social housing, wealthy, old young, labour or conservative bias to mention just a few. Are they currently really cheap or expensive and when did they last get an increase and has it been regular like every other year for example. Only you will really know how your client base is.

my guess is most don’t like to have vat added. But maybe just issue a price increase and don’t forwards tell them vat.

there is no signs saying your paying vat when you go into most consumer business to customer shops except a small bit on the receipt after you’ve paid.

i would do a lot of reading the gov sure for info. 
 

I would say your best bet is to speak to an accountant about it. They help businesses go through this all the time and each of our businesses is unique so what advice works for one may be useful to another.

discussing your specifics with an accountant will help. 
also. If you have different companies that perform similar services check into group vat. I understand that if you have multiple companies performing like services it can appear as splitting and look like evasion.
 

it’s best to be proactive with things like that and ensure what you’re doing is above board as sometimes we can do something not realising it’s causing an issue. 
 

hmrc may not see it like that if that is the case. I’m not sure what your scenario is but it’s worth noting just in case. Better to be safe than sorry.

all the best 

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In the coming months if they drop the vat threshold I'll be dropping customers, I ain't messing on with vat and I don't see that many accepting a 12-20% increase on their regular window cleaning bill more so if you have raised your prices in the last 6 months 

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On 14/05/2020 at 22:20, Omega said:

Hi there.

not sure how much you know on vat so I’ll try to answer based on what I understand. Apologies if it’s covering basics.

you can register for vat whenever. You have to once your projected sales are going to pass 85k on a rolling 1 year basis.

depending on your costs you can either pay over 20% of sales

or

pay over a simplified rate of around 12% for our industry if you meet certain cost criteria.

first year is 1% discount.

whether your clients will like it will depend on your client demographics whether they are social housing, wealthy, old young, labour or conservative bias to mention just a few. Are they currently really cheap or expensive and when did they last get an increase and has it been regular like every other year for example. Only you will really know how your client base is.

my guess is most don’t like to have vat added. But maybe just issue a price increase and don’t forwards tell them vat.

there is no signs saying your paying vat when you go into most consumer business to customer shops except a small bit on the receipt after you’ve paid.

i would do a lot of reading the gov sure for info. 
 

I would say your best bet is to speak to an accountant about it. They help businesses go through this all the time and each of our businesses is unique so what advice works for one may be useful to another.

discussing your specifics with an accountant will help. 
also. If you have different companies that perform similar services check into group vat. I understand that if you have multiple companies performing like services it can appear as splitting and look like evasion.
 

it’s best to be proactive with things like that and ensure what you’re doing is above board as sometimes we can do something not realising it’s causing an issue. 
 

hmrc may not see it like that if that is the case. I’m not sure what your scenario is but it’s worth noting just in case. Better to be safe than sorry.

all the best 

Thank you for taking the time to give me a detailed response, 

i will be having talks with my accountant this week, and Im probably just going to go down the route of issuing a price increase, past 2 years we have issued price increases, but they have only been small, and some work is underpriced.  

Limited companies are just separate for Domestic & Commercial. 

But yes, been proactive is defiantly my approach. 

Thanks again

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5 hours ago, DCDom said:

Limited companies are just separate for Domestic & Commercial. 

What do you mean by this?

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scottish cleaning service

I might be looking at vat registration next year if the work continues to come in. My old neighbour sold his cleaning company and got in touch with me. He had contracts with the health board and knows everyone involved. Didn't intend to expand but sometimes everything fits into place and motion takes over. Will keep forum up to date and it will be a good learning tool for anyone else in the same position. 😉

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2 hours ago, Part Timer said:

What do you mean by this?

Hi,

 

So I have one limited company for commercial work. 

The other is for domestic work. 

 

 

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28 minutes ago, DCDom said:

Hi,

 

So I have one limited company for commercial work. 

The other is for domestic work. 

 

 

Ok, I don't know how they are set up but if they have the same set up, Shareholders, Directors etc, if you get inspected HMRC can look at them as the same company and purely there for VAT registration avoidance. As you're looking to register for VAT now then it shouldn't matter.

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43 minutes ago, Part Timer said:

Ok, I don't know how they are set up but if they have the same set up, Shareholders, Directors etc, if you get inspected HMRC can look at them as the same company and purely there for VAT registration avoidance. As you're looking to register for VAT now then it shouldn't matter.

Hi,

 

Sorry should of made my self more clear, my commercial company is vat registered. 

 

My question was, how you guys go about adding the vat onto pre existing clients (domestic).. how the customer handles that increase. 

 

Hope I cleared up any queries.

 

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  • 2 weeks later...
On 17/05/2020 at 12:29, DCDom said:

Hi,

 

Sorry should of made my self more clear, my commercial company is vat registered. 

 

My question was, how you guys go about adding the vat onto pre existing clients (domestic).. how the customer handles that increase. 

 

Hope I cleared up any queries.

 

So you got 2 companys and one is VAT registered and the other is not VAT registered, the VAT man doesnt care if one business services domestic and the other services commercial , end of the day your offering the same service so your business should be all 1 business, the VAT man will want you to cough up all the VAT $$ on the domestic customers , VAT is not a joke and is a lot  more serious then Tax.



 

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2 minutes ago, harunh said:

So you got 2 companys and one is VAT registered and the other is not VAT registered, the VAT man doesnt care if one business services domestic and the other services commercial , end of the day your offering the same service so your business should be all 1 business, the VAT man will want you to cough up all the VAT $$ on the domestic customers , VAT is not a joke and is a lot  more serious then Tax.



 

When did I say it's not going to be vat registered? 

Currently under the vat threshold, but with expansion I'm asking the questions to be ready. 

 

Thank you for the input.

 

 

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