Hello,
My wife and I (business partners) have just completed our first season of trading. Runs from march until november at a holiday park catering concession. We turned over 56k with a profit of 21k after 8k of rent and all the food/ staff costs.
we have been invited to take on a different holiday park after a good performance .
this new park is much bigger and would be 17k rent but a similar formular on food costs etc.
The problem being it looks likely that by working at this bigger park we may break the vat threshold but we are not exactly sure by how much. (Between 90k and 120k we think)
Is there any way of making vat work for us on this bigger venture or would it be wise to stick with what we know and stay under at the other park. We cant stop trading until the end of the parks season so I cant just clise when/ if we get to 80k.
We really want to work hard and make more money but feel a little trapped.
can flat rate work for a venture like ours ?
Any help is appreciated andni can give more detail if needed
kind regards
c
Replies (8)
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Incorporate
As has been debated at length recently here, if you set up a limited company before reaching the threshold, the partnership turnover won't count and you can start again. Built in excuse too with the extra risk!
Catering businesses are the worst hit - no VAT on raw purchases, but VAT on sales.
When VAT is inevitable, the FRS May work, but also consider the rules on takeaway cold food if this is relevant as these sales may be zero rated still
Hope this helps
Would you care to explain VAT Doctor
As has been debated at length recently here, if you set up a limited company before reaching the threshold, the partnership turnover won't count and you can start again.helps
Why does the partnership turnover not count, when there has been a transfer of a going concern? See: http://www.bailii.org/uk/cases/UKFTT/TC/2012/TC02371.html
Flat Rate/Companies
Flat rate scheme- 12.5%.
I have similar clients- are you doing alcohol as that has VAT on purchases? Lots of sandwiches at zero% etc- might get you to about 7.5% net VAT rate anyway.
Have one limited company for each site so existing site gets Nil VAT still.
@ Basil
Thank you. I have re-read VATA 1994, section 49 and see the crucial words "transfer by a taxable person."
Saved
Thank you. I have re-read VATA 1994, section 49 and see the crucial words "transfer by a taxable person."
@Basil, beat me to it (and saved me from a PNL roasting no doubt!)