Taxable turnover calculation

Taxable turnover calculation

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Help  - 2 questions really, all in a desperate effort to avoid/delay registering for VAT 

Firstly how do I calculate my VAT taxable turnover to determine whether and when I need to register for VAT 

I know its based on a 12 month rolling period but I'm confused as to whether this is determined on :

- invoice dates

- payment received dates

- services supplied or completed date

This is relevant as will determine  when I should send out my next invoice as depending on above I may end up over the threshold

Secondly, and I live in ever decreasing hope here..are there any areas of my turnover which may be VAT exempt

I’m pretty much guessing no but here goes..

I'm a sole trader and part of my income is from managing charity/community projects (health, social care, training). 

I source grant funding for charities and then invoice them for managing these projects. 

In addition I also source my own contracts from public sector/community groups etc and I’m paid directly for provision of similar type of services which I myself manage and also contract out aspects of the work to charities and other training providers.

I’m not a registered provider as such but then funding for my work does emanate from either grants or government funding. Therefore Iis all this income taxable turnover?

I can’t  imagine the types of orgs I work with such as charities or community groups would appreciate my services costing 20% more and I won't appreciate 20% less either...argh!

Replies (10)

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By Tim Vane
08th Jan 2015 23:59

These are all questions for your accountant. If you have turnover anywhere near the VAT threshold and you have not yet got an accountant then the only sensible advice is to go get one.

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Replying to Elgin:
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By dom23
09th Jan 2015 00:12

apologies must have misjudged the forum. Thought there might be advice beyond that..

 

 

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Replying to lionofludesch:
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By jpcentral
09th Jan 2015 07:51

Beyond that

If your query is pretty straightforward you would normally get further advice. Your query is complex and would require quite a lot more information. VAT in connection with charities/healthcare is a complex area and I certainly wouldn't feel comfortable in giving advice in the context of a forum of this type because I would have to make a lot of assumptions - or ask a lot of questions.

From your point of view, this is a pretty important matter and getting it wrong could have serious consequences and I would not recommend that you act on advice from a bunch of strangers who have no real interest in the outcome - or have any liability in the event of something going wrong.

Taking proper advice from someone who can ask the relevant questions is going to be your safest option.

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Replying to lionofludesch:
Stepurhan
By stepurhan
09th Jan 2015 09:45

Common mistake

dom23 wrote:
apologies must have misjudged the forum. Thought there might be advice beyond that..
Technically this is a forum for accountants, not the general public. It's a common mistake.

But members of the general public do often receive answers. The problem with your question is that there are too many factors in play to give a simple answer. No-one wants to get into a protracted question and answer session with you on here to get all the relevant facts.

To answer your basic query, the turnover counted for VAT registration purposes is based on the tax point rules. For what you are doing the invoice date is almost certainly going to be the key one, with the 15 day rule coming in if you delay invoicing to try to stay below the limit. Whether all of your income belongs in the calculation is a trickier question.

That's not your only concern either. You talk about either charging your customers 20% more or getting 20% less yourself. If you maintained your prices and took the hit yourself, you'd be looking at 17% less (rounded), and that's even before considering any input VAT reclaim. There are also other ways of accounting for VAT that might soften the blow. You really need to talk this through face to face with someone that has all the facts.

There is one simple way to make the problem go away of course. Do less. If your income (however calculated) isn't even near the threshold you don't have to worry.

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Replying to Matrix:
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By dom23
09th Jan 2015 15:01

many thanks for your reply.

many thanks for your replies. very helpful. And I will indeed be seeing an accountant to discuss in more detail. Its just really useful to be armed with some knowledge myself so i can ask the right questions.

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Replying to lionofludesch:
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By User deleted
09th Jan 2015 09:45

Charities?

dom23 wrote:

I source grant funding for charities and then invoice them

 

How charitable

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Replying to whitevanman:
RLI
By lionofludesch
09th Jan 2015 11:05

Take your point, but .....

BananaMan wrote:

dom23 wrote:

I source grant funding for charities and then invoice them

How charitable

Sourcing grants is actually a valuable service these days.  If you don't out-source it, you have to do it yourself.   It's complex and there's a lot of time cost involved.  It's not something you can do while you're sitting watching Emmerdale.

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Replying to whitevanman:
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By dom23
09th Jan 2015 12:45

...for managing these projects banana man

your understanding of business and social enterprise is mighty impressive

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Replying to whitevanman:
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By dom23
09th Jan 2015 12:44

...

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RLI
By lionofludesch
09th Jan 2015 11:02

@OP

Just too many variables, pal.

The accountant that you're on the point of appointing will need to go through your procedures with a fine tooth comb.  You're not going to get good enough advice from an internet forum.  If you get it wrong, there are thousands at stake.  Take the advice at face value and visit that accountant.

Sounds like you're only delaying the inevitable though.   Keeping your turnover below £81000 puts a glass ceiling on your income.

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