Advice on moving business to VAT Registered

[Brassneck]

At some point soon I'm going to have to register for VAT.

I'm going to get some advice, but had a few quick questions related to domain businesses that I expect some of you will already have worked out the answers to!

- are earnings from parking companies generally VAT exempt - I have a feeling that all the main ones are registered outside of Europe?

- domain sales - presumably VAT depends on whether it is sold in UK, to somebody in Europe or outside of Europe?

- have most of you moved onto the flat rate VAT or the normal regime?

If anybody has any particular advice I would appreciate it.

Thanks
Stephen.

[essexboy]

Wish I had your problems.

[stevebrowne]

are earnings from parking companies generally VAT exempt - I have a feeling that all the main ones are registered outside of Europe?

If the earnings come from abroad then there is no VAT. I don't have any parking, but AdSense for instance (and Amazon) don't have VAT on them.

domain sales - presumably VAT depends on whether it is sold in UK, to somebody in Europe or outside of Europe?

If you sell to someone in the UK, you must add VAT. If you sell to someone in EU, then you add VAT UNLESS they provide their VAT number I think. If it is non EU then you don't add VAT.

have most of you moved onto the flat rate VAT or the normal regime?

I was on normal when the flat rate came in and have stayed on it, but I need to see whether flat rate is better now. The paperwork would be easier! Remember if you are flat rate, you won't be able to claim back the vat for nominet, hosting (depending if its UK etc. 1&1 charge VAT which I can claim back for instance)

[njf]

Concur with what Steve said:

* Non-EU sales are "Out of Scope" for VAT

* EU B2B sales are exempt if they supply a verifiable VAT number, VAT man inspection will involve you demonstrating that. Check here: EUROPA site - Validation If you make a lot of these type of sales - the VAT man will detect these in your return numbers - query - and ask you to fill in an EU B2B tracking form (you can volunteer to do this I think).

FRS is likely good for you if your costs are low (generally for this business they are), although there are some provisions to offset high-cost one-off purchases - can't remember what they are off the top of my head, but don't think they apply much here. FRS has some upper turnover limits - over them and you are out. If you don't have an accountant, FRS will save you some spreadsheet time...

Just found this doublechecking something - FRS advice aimed at affilliate marketing:

Flat rate VAT scheme | Affiliate Marketing VAT Help | Call 01226 379000 | Amazon Commissions | Ebay : HRBS.biz | Fixed Fee Accountants | Free Guides | Save Tax | VAT Advice | Self Employment Help

...doublecheck the have that 8.5% rate right though...give the HMRC a call, they are friendly types.

Nick.

[Brassneck]

Nick / Steve

Thanks very much - that's really helpful.

Cheers
Stephen.

[Jeewhizz]

FRS wasn't the best solution for us, as we don't solely deal with just domains (we do a lot of servers etc) which we couldn't then claim the VAT back on. In fact, I believe we ended up about £50 better off on the FRS, but there is a lot more calculations to do etc. However, as you use Kashflow, I believe this will do it all for you

The only real person who can advise you is an accountant who has access to your accounts etc. FRS might be best, it might not. Also look at cash accounting, as that can be beneficial, especially in the current climate

[TinkyWinky]

Hi Stephen

Just quickly - in the ealry days FRS VAT was a peach of a deal for thos businesses in the know. Especially when you had two limited companies apparently - one takes almost all the little costs that add up and is on normal VAT (so you claim all back) the other takes minimal if any costs yet does all the billing out.

So you bill out all invoices with 17.5% as was yet pay as little as 4% FR VAT. So in effect, with low costs it was possible apparently to make additional 12% earnings for doing nothing.

In other words if a business was turning over £100k - well you can do the maths...

Also the FRS meant no complicated forms to complete.

But things have changed - a few people I know were re-assessed when they came wise to this little legal profit vehicle and especially with the current fall to 15% - this was not passed on to single business companies through the FRS.... in effect shortening a chance of making it worthwhile. I know a few people who have come off all together as they just can't make the figures stack up and are worse off than if they were on normal VAT.

Once again a great idea in principle - but ill-thought out from a Government point of view... sounds like all the bldy ideas this government are now coming out with !!!!

Hope that helps.
TW