Discussion in 'Builders' Talk' started by Hoskie, Oct 23, 2005.
Just out of interest how many of you are VAT registered and are any of you a LTD Company?
VAT Yes, Ltd NO, Going Ltd next tax year when I move into bigger premises.
Knew I could rely on Mudster for an answer! Iv just registered for VAT any my accountant says I should go LTD. All of a sudden things have got a whole lot more complicated.
For example: My friend is building an extension and put his materials on my account which I am going to off set against my VAT but Iv been told that this is not a good idea.
What do you think?
I've been trading for just over three years, after the first year I was forced to go VAT registered and just this year I went Limited.
Agree, going Limited is a complete pain in the ar5e, but once all of your suppliers etc know then it all runs smoothly. You do need a good Accountant though to help you through the transitional period.
Not VATregistered and trying hard not to be, I'm a sole trader and don't employ anyone but I keep bumping up against the threshold.
I just don't want the hassle of extra paperwork and I think that it will cost me work as my charges will rise by the VAT rate but I won't be able to increase my work load without taking bodies on and I really don't want that.
Being Ltd. used to be quite a ttractive until GB changed the tax rules on dividends, so I can't see the point of going there either
Cheers for that lads.So am I wise trying to offset a friends building materials against my VAT? As they have gone on my trade account who would no? (Apart from everyone reading this, hope the VAT man does not pop into this forum!)
Hello Mr Hoskie.........................Im Watching you very very closely................Very close indeed..
like tkf i keep nudging the limit and i do not want to cross it. most of my work is domestic and dont want it any other way. i have found that as most of my work is now reccomendation that i am getting customers to pay for things like kitchens, windows and all other things like that and i just charge labour. i sort it all out for them and they just give a cheque in the suppliers name. they seem happy with this as i give them the discount i would get and it bumps my discounts up at suppliers so for my jobs i supply i get better deals which i dont pass on. equals itself out and keeps me below.
So am I wise trying to offset a friends building materials against my VAT? As they have gone on my trade account who would no?
What you would be doing is VAT fraud.
Could you get caught, probably not - but if the VAT man elects to pay you a visit you had better be squeaky clean. ie if you've bought materials you had better be able to show them as stock or show an invoice were you sold them on. I seem to recall they can trawl back 7 years.
Most people don't realise it but the VAT man has enormous legal powers that don't require warrants for them to be executed. Is being woken at 3.00am as they burst through your door worth fiddling a few quid, me I'd like to sleep at night.
Yup Customs & Excise don't need any of the nuisance things like a warrant to enter your premises, they can and do just walk in.
As for the Building materials question, technically it's VAT fraud, down to you if you want to risk it.
An aside to this is, once your turnover reaches a certain point and your jobs reach a certatin size, people stop asking to pay cash, or so I found.
Suits me fine, I'd prefer to be all above board anyhow, no need to remember what all the lies are.
Fortunately I've got to a position where it doesn't matter if I mkae a sale or get a particular job so I don't need to barter with people.
I am having a bit of a hard time at the moment with zero rated supplies though, particularly to new builds and listed buildings, I've spent an hour on the phone to C&E this week alone and I've still been unable to find someone who can provide definitive answers.
Cheers lads. Well I was guessing its fraud and Im very aware of the powers of customs and excise, they have greater powers than the police and as you all rightly say they dont need warrents to enter a property.
I told my mate to put the supplies on my account because the more I spend the better deal I get. Will this effect my VAT return as a purchase or is it irrelevant?
I told my mate to put the supplies on my account
because the more I spend the better deal I get. Will
this effect my VAT return as a purchase or is it
All the materials bought (for whatever job) will affect your vat return as you are paying vat when you buy the materials but can claim it back on the vat return.
You should invoice your mate for what he's had, just like a job, but of course you'll have to charge him vat too. The only saving made is the fact you may get the materials slightly cheaper due to volume of goods bought.
<u>I seem to recall they can trawl back 7 years.</u>
The VAT man won't do any trawling. If he finds an error he can assume that you've made the same error for the previous 7 years.
So, if he finds that you've stuffed him for £1k of VAT in a return period of Jan-March 2005, he is entitled to assume you've had the same £1k for each quarter for the previous 7 years ( 4 x 7 x 1000 = £28k ).
Then it's up to you to do the trawling and prove otherwise !!
The moral of the story and the comments made by others is dont mess with the VAT man. He is the Tax man's nasty big brother .....
On the flip side of all this doom and gloom, if I ever need advice or I'm not quite sure what I should or shouldn't be claiming/charging I phone them.
Their helpline truly is helpful, and every enquiry you make is logged on your account.
I've always paid on time and phoned when I needed advice, and I've never been inspected......coincidence?....maybe..maybe not.
Has Anyone ever had their fuel tank dipped, to test for red diesel?
No but I've passed at least four or five of the road checks over the years, each tiume I just happened to be driving a car not a van.
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