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VAT - Voluntary registration

Feeling rather embarrassed

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I guess I shouldn't feel so insecure, but did any other sole practitioners feel embarrassed about not being VAT registered?

I've taken on a few "larger clients" trading in the hundreds of thousands and I am a little worried about how it looks not being registered for VAT, I've had a couple ask me questions about why there is no VAT on my invoice.

I realise now I have underpriced most of my smaller clients who are unable to reclaim VAT, so wouldn't feel too guilty about adding 20% VAT onto their invoices, that said additional VAT returns arent something I would look forward to!

 

 

Replies (13)

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RLI
By lionofludesch
13th Aug 2019 14:24

It's never bothered me.

It's a good sales advantage for unregistered businesses. No VAT registered business has ever mentioned it to me.

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Hallerud at Easter
By DJKL
13th Aug 2019 14:42

Never bothered mine either and most of my clients had a turnover of at least £100,000 (In fact all did except two who were vat registered but just below and two who were just tax return clients)

I possibly ought to have gone for a voluntary registration but frankly the vat savings on purchases never seemed sufficient to reward my time.

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Replying to DJKL:
RLI
By lionofludesch
13th Aug 2019 14:56

If you split the difference and up your charge to the unregistered by, say, 10%, you can cover input tax.

Everyone's a winner - except HMRC and who cares about them anyway ?

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By Matrix
13th Aug 2019 15:10

Use it as a selling point (for now, you hopefully will need to register in the foreseeable future).

The good old days of the FRS savings are gone. I just missed it. When I registered the only objection was from an exempt client, no personal tax clients.

If you are that bothered then register, you will recover input VAT on the escalating software costs.

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By memyself-eye
13th Aug 2019 19:51

not registered either - and don't intend to. Can do without the hassle and not interested in the extra income....

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Replying to memyself-eye:
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By Yorkshireblue
20th Aug 2019 13:16

memyself-eye wrote:

not registered either - and don't intend to. Can do without the hassle and not interested in the extra income....


Ditto....never been an issue in 25+years. I it as a selling tool to small traders and private clients.
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By JoF
14th Aug 2019 12:08

Im not registered. Never been an issue with clients, other than one who was pleasantly surprised not to have so much going out from a cashflow basis on his first invoice after thinking I was VAT reg.

I would rather bubble away under the threshold rather than faff every 3 months, especially with MTD.

Seriously thinking of packing it in anyway. So fed up with it all.

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By Jan CM
20th Aug 2019 11:46

I'm a small practice and therefore haven't needed to register for VAT and hoping not to, as I don't think it will bring too many benefits if I do. I haven't ever worried about registering and I don't recall any of my clients (some of whom have turnover in excess of £100k) having an issue with it or querying it.

If you are concerned some clients may feel odd about it, you should think about whether you should register voluntarily, but personally I think the costs of doing so out way the benefits, at present.

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By Charlie Carne
20th Aug 2019 12:20

SouthCoastAcc wrote:

I realise now I have underpriced most of my smaller clients who are unable to reclaim VAT, so wouldn't feel too guilty about adding 20% VAT onto their invoices, that said additional VAT returns arent something I would look forward to!


I'd make two points:
(1) if you are under-pricing and there is scope to increase their prices by 20%, then do so (even if you remain non-VAT registered).
(2) how is filing a VAT return for your own practice a burden for an accountant? Surely you maintain your books on a regular basis and, I hope, in a modern, cloud-based system that will allow MTD filing (which you don't even need to comply with if you are under the £85k threshold) at the push of a button?
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By Vallery Lee
20th Aug 2019 12:30

Most of my clients are "small" and so cannot reclaim; thus they are happy and recommend me to their friends. All good. You say that you would be happy to add 20% to your smaller clients invoices although they cannot reclaim - I have to say that I do not understand this.
I certainly do not feel embarrassed about no longer being registered. If I picked up a couple of larger companies and needed to re-register I would do so.
I suppose the short answer is that I am happy as I am.

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By MissAccounting
20th Aug 2019 12:34

Depends where you want to position your Practice, if youre happy with clients in the £10k-£100k turnover bracket then your fee income could possible never go over the VAT threshold but if you are looking at £m+ turnover business then chances are your fee income will take you over the threshold at some point due to the bigger fees.

I registered form day one so that I didnt have to increase prices for those clients that werent VAT registered when I hit the threshold and as Charlie Carne suggests its not really a burden for an accountant is it?

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By JDBENJAMIN
20th Aug 2019 18:37

I've been happily unregistered for 20 years. Registered clients couldn't care less, and unregistered ones appreciate the saving. Don't worry about it.

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By David Scott
21st Aug 2019 12:13

I was paranoid about the "price increase" for my clients who were not registered for VAT when it came to the point when my practice had to register.
I explained in every appropriate case that "the fees were the same as last year, but I have to add VAT this year" ( effectively blaming HMRC)
It was a non-event as I lost one client only.
New clients after that point assumed I was registered so it was not an issue

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