Registering for VAT...

JohnCleary

Hi all,
I'm a small time Sole Trader (IT) not registered for VAT as almost all of my clients are not companies, so it's not an issue.

I've noticed lately that i've been buying more and more equipment soely for my work (Laptop, testing equipment etc.)

So if I register for VAT, when I buy a product for the business, do I have to claim the 21% back at a certain time of the year, or do I just not pay it?

If I register for VAT, I presume I just charge the clients an extra 21% VAT - Do I keep all my receipts and send them to the Revenue at a certain time of the year?

What happens if i've claimed back more VAT (ie. from buying equipment for the business) than i've charged (ie. charged customers)?

As liability isin't an issue for me at the moment, I don't want to set up a limited company so am happy as a sole trader - I presume a sole trader can be VAT registered no problem?


I know an accountant could answer this for me in a flash, and I would get an accountant if I go down this route, but I would like to educate myself a little first.

Many thanks for the help

Savman

www.revenue.ie tbh

niceirishfella

John,
Ring revenue and ask for the handy guide book they do for VAT - its a rivetting read but gives a decent overview on how this fantastic value added taxation system works. ;-)

Continued success to you!

JoeTurner

Hi John

You can download a pdf version of A Guide to VAT for Small Businesses here: http://www.revenue.ie/leaflets/it49.pdf

There's a more detailed version here:
http://www.revenue.ie/leaflets/vatguide_2008.pdf

Joe

JohnCleary

Brilliant thanks for the links guys much appreciated

byrne0f56789

John when dealing with the revenue make sure you get them to confirm their advice in writing (email). I know its not likely but just in case there was a mistake in the system (I've heard a few horror stories).

You will be expected to fill in a VAT return every 2 months. Its not hard to do and you probably would not need an accountant as long as you organise the VAT payments you received from customers so you just have to tot them up at the end of the period. Revenue online line is easy to use, and in my opinion easier to use than the paper forms.

JohnCleary

byrne0f56789 wrote: »

John when dealing with the revenue make sure you get them to confirm their advice in writing (email). I know its not likely but just in case there was a mistake in the system (I've heard a few horror stories).

You will be expected to fill in a VAT return every 2 months. Its not hard to do and you probably would not need an accountant as long as you organise the VAT payments you received from customers so you just have to tot them up at the end of the period. Revenue online line is easy to use, and in my opinion easier to use than the paper forms.

Just the info I was looking for, thanks

Is the 2 month return for both VAT payments TO the Revenue, and claims back FROM Revenue?

Savman

Yes. A standard VAT return is money you owe them and vice versa. If you're in credit they credit your bank account.

They have a bi-annual option for VAT returns now i.e. every 6 months.

JohnCleary

Brilliant, thanks a lot lads!

shels4ever

You can also set up a direct debit for this to pay the vat ever 2 months, then do your total at the end of the year. I'm doing it this way once I get established.

Camone

I'm just doing up VAT returns for the first time for the sept/oct period, having just registered a company and for VAT in early sept. Just wondering when filling in the expenses part of the statement, am I able to include expenses which date back to earlier in the year, as these were all costs associated with the setting up of the company?

Mr Clonfadda

Section 2.17 of vat guide states

"A person who is setting up a business but who has not yet commenced supplying taxable goods or services may register for VAT as soon as it is clear that he or she will become an accountable person

This will enable that person to obtain credit for VAT on purchases made before trading actually commences."