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VAT Question
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Excuse me if this sounds a silly question but never having done this sort of thing before I havn`t a clue!
I started a small retail business when I saw a gap in the market. The first week I took £200. I have been running 4 months now and every week double the takings are coming in!! Yippee my plan is working I think??? Anyway, to cut to the chase…my profit marjins are very poor ie: 30%. AM I correct in thinking if my turnoever gets to a certain amount I think it is £70k or something, the government will require 20% of my earnings leaving me with 10%??? If this is the case I see no point in allowing my business to attain this level of income, and will adapt my business hours accordingly. I hope I am wrong as I love my work and also thought about employing someone to help out at weekends.
As I say I apologise is this seems a daft question but if I don’t ask etc! Thanks anyone in advance.
I started a small retail business when I saw a gap in the market. The first week I took £200. I have been running 4 months now and every week double the takings are coming in!! Yippee my plan is working I think??? Anyway, to cut to the chase…my profit marjins are very poor ie: 30%. AM I correct in thinking if my turnoever gets to a certain amount I think it is £70k or something, the government will require 20% of my earnings leaving me with 10%??? If this is the case I see no point in allowing my business to attain this level of income, and will adapt my business hours accordingly. I hope I am wrong as I love my work and also thought about employing someone to help out at weekends.
As I say I apologise is this seems a daft question but if I don’t ask etc! Thanks anyone in advance.
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Shutting shop for a week or two is hardly likely to help 1eyedjack. Unless of course customers who would have bought that week can't wait and buy elsewhere instead. If they just wait a week or two then he'l ljust turnover a lot more as soon as he re-opens which will merely delay the registration by a week or two.
If it's really worth the hassle then starting a separate business to deal with half the trade will keep both outside VAT but remember tha business cannot be run by the same combination of people. ie you are your wife can run one as a partnership whilst you run the other yourself. You can't run both as separate partnerships with the wife as that would count as one business for VAT purposes.
If it's really worth the hassle then starting a separate business to deal with half the trade will keep both outside VAT but remember tha business cannot be run by the same combination of people. ie you are your wife can run one as a partnership whilst you run the other yourself. You can't run both as separate partnerships with the wife as that would count as one business for VAT purposes.
Just to emphasise a point which I suspect has been made already, but may have been overlooked. If you are selling to businesses, they may well be VAT registered, and therefore if you have to add VAT to the price you are charging them, it does not cost them anything, because they reclaim the VAT. So adding VAT is not a rice rise for them. Apologies if you already are aware of this but it is important.
