VAT on labour for self employed | AccountingWEB

VAT on labour for self employed

Hi ,

      I have been advising a self employed friend on whether or not to register for VAT .

      This would be a voluntary registration as he is currently below the threshold .

      His prime business is Hedge cutting , usually around farmers fields but this also includes other

      general farming work , for example , sowing and harvesting .

      The work can involve using his own tractor but sometimes not .

      My question is , if he did register for VAT , and the fact that most of the invoice would be "labour time" ,

      would the labour element be chargeable for VAT ?

      Thanks Kevin

      

Comments
Paul Scholes's picture

Yep

Paul Scholes | | Permalink

There is no distinction between labour and say materials, once VAT registered he'd add VAT to everything he billed.

Still definitely worth it though...    1 thanks

mackthefork | | Permalink

Adding VAT would make no difference to 99% of his customers, and he will be able to reclaim VAT on his expenses, and sharpen up his prices or better yet make more money, might even consider the flat rate VAT scheme.

Regards

MtF

Still definitely worth it though...

mackthefork | | Permalink

Adding VAT would make no difference to 99% of his customers, and he will be able to reclaim VAT on his expenses, and sharpen up his prices or better yet make more money, might even consider the flat rate VAT scheme.

Regards

MtF

blok's picture

,

blok | | Permalink

dont forget input vat on pre registration expenses.

when did he buy that tractor?

The VAT Doctor's picture

Why not consider going the whole hog?

The VAT Doctor | | Permalink

Maybe consider a retrospective voluntary registration with a VAT only invoice issued to his VAT registered customers for the additional VAT, which they can recover. VAT can then be recovered on costs up to 8 years ago - pre registration VAT on goods is recoverable in prince up to 4 years before the date of registration, which can be up to 4 years ago.

Many thanks for you reply

kevinform | | Permalink

Many thanks for you reply

Kevin

Thank you for your response .

kevinform | | Permalink

Thank you for your response .

Does the same apply to output vat on pre registration ?

He bought the tractor second hand a couple of years ago . 

He is thinking of investing to a newer one at a cost of approx £8k .

Thanks Kevin

Many thanks for your advice .

kevinform | | Permalink

Many thanks for your advice .