VAT deregistration

[calmncomfy]

We are deregistering from VAT tomorrow and will need to remove all VAT from actinic. I see in business setting how to remove VAT number from invoices but how do I no-longer charge VAT. Also we will need to keep historic data with VAT, how do we do this?

Thanks

[Paul Bulpit]

You may like to reconsider

I cannot answer your question as far as Actinic is concerned, but you may bear in mind that the VAT Threshold (obliging you TO register as your turnover increases) is NOT making any obligation on you to de-register when turnover falls.

Whilst I appreciate that you may consider the paperwork is not worth the hassle (with modern accounting software, there is no real paperwork, unlike years ago) - for many businesses, the ability to CLAIM BACK VAT on your various outgoings far outweighs the effect that charging the tax has on your sales. I urge you to reconsider.

For instance, you MUST be paying VAT on your purchases of goods and therefore including this cost in your selling price - so what difference will it make to your sales? None whatsoever.

What deregistration WILL do is curtail your ability to recover 15% of YOUR COSTS of fuel, 'phone, carriage etc.* (if you don't have these costs I stand corrected). From 4th January 2011 this figure will be 16.65% for the foreseeable coalition future.


*edit later: packaging materials: bubble-wrap, parcel tape, boxes. Software. hosting, advertising, stationery, print, electricity, gas, vehicle repairs, hardware replacements, consultancy. Print cartridges, pens, envelopes. Repairs & renewals - light bulbs, drain-cleaning....

[Mike Hughes]

many businesses, the ability to CLAIM BACK VAT on your various outgoings far outweighs the effect that charging the tax has on your sales.

I'm not sure I'd agree with that. Certainly not for a consumer retail business.

As long as your sales value is higher than your expenses, i.e. you're profitable (Or cash flow positive if you want to consider capital expenditure), then you're better off not being VAT registered.

Mike

[Mark H]

Apart from the customer confidence aspect. As a customer I personally would think twice about buying certain types of goods from a company that wasn't VAT registered, and in the very early days we became VAT registered (although not required to) in order to appear more "convincing".

[leehack]

I'm not so sure VAT instills confidence in a customer, (i'm yet to meet someone happy to pay it) i always thought it was things like retail premises that were much more powerful at that. When you're ticking off your checklist to proceed on a purchase or not, i don't see 'are they vat registered' as one of them myself.

[Mark H]

As ever, a lot depends on what market you're in. We got a lot of commercial customers virtully from day one, and I'm sure they would have thought it odd if we weren't VAT registered (or, indeed, a limited company).

[Mike Hughes]

We got a lot of commercial customers virtully from day one

For commercial customer's it is important that you're VAT registered*. This way they can claim back the VAT they pay out.

Mike

* Assuming that you charge the same market price for goods whether VAT registered or not.