Forum
Vat Problems !
Sixfingers
Messages count : 1
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24 January 2009
Hi there new to this forum
As from end of last year ive had to become vat registered đ
The problem i have is 50% of my customers are non vat registered so the added cost of vat is making them run for the hills! Have lost 4 jobs so far this year which is not good in this climate,I have looked at ways of keeping costs down (ie) reduced labour costs! option (2) is that i absorb the vat on materials because i charge vat on final cost of job of which is labour and materials,Or is this the way it should be done?
Because charging vat twice as such is pushing the cost up to far!
Any ideas/veiws would be Great!
As from end of last year ive had to become vat registered đ
The problem i have is 50% of my customers are non vat registered so the added cost of vat is making them run for the hills! Have lost 4 jobs so far this year which is not good in this climate,I have looked at ways of keeping costs down (ie) reduced labour costs! option (2) is that i absorb the vat on materials because i charge vat on final cost of job of which is labour and materials,Or is this the way it should be done?
Because charging vat twice as such is pushing the cost up to far!
Any ideas/veiws would be Great!
- Contact in PM
RobCT
Messages count : 3Likes count : 0Registration : 14 January 2009I think you work on quite different stuff from me - so don't quote me (and I hope others can pitch in)... but in general you are right that the way to keep those customers on board is that you charge them a fee that is appropriate once VAT has been included. That does, as you can see, mean that you lose out a little when dealing with those non-VAT-registered customers. The VAT registered ones are really only paying the before-VAT-added price (in effect they get to claim the VAT back) whereas the not-VAT-registered ones have to pay the full thing.
In my case, I have both too - but I tend to get larger contracts with the VAT registered customers anyway - so I don't really lose out.
Don't miss the flat rate scheme that's available for VAT by the way. This makes life much simpler for some people (me included).
On the materials thing - don't forget that you are now paying less for them! I'm not clear that you've quite understood this (no criticism intended - just thought that's worth pointing out as a possibility).
Good luck with this. There's a lot to absorb all at one time in regard to VAT. - Contact in PM
rich months
Messages count : 5Likes count : 0Registration : 19 February 2009I was going to ask exactly what Rob has - are you on the Flat Rate VAT scheme?