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registering for VAT - whats the deal

  • 07-01-2009 10:28PM
    #1
    voxpop
    Registered Users, Registered Users 2 Posts: 2,798 ✭✭✭


    Ive become a sole trader recently and Im a bit confused over the whole VAT thing. Im not too sure how long I will stay as a sole trader - it could be a few months or a year, maybe more. The issue is that according to the VAT guidelines, I should register if my turnover is likely to be over 35k(thats in a tax year I assume) or so. Now it will be, If I work the whole year, but wont be if I end up only working a few months.
    The question is : if I leave VAT registration until I know I will be going over the threshold, will the revenue be looking for back dated VAT or just the VAT since I registered?


Comments

  • #2
    hebeegb
    Closed Accounts Posts: 21 ✭hebeegb


    unfortunatly, it will be for all the VAT which occured in the trading period, or calendar year, you can always de-register


  • #3
    voxpop
    Registered Users, Registered Users 2 Posts: 2,798 ✭✭✭voxpop


    So if you dont think you will be over the threshold and dont register for VAT and then in December of the year you go over the threshold - the revenue will be looking for a years VAT !!??


  • #4
    hebeegb
    Closed Accounts Posts: 21 ✭hebeegb


    if you are on the margin of the threshold, the revenue will be fine, but say you know turnover is going to exceed, you should register. the revenue dont want you registering if its unlikely you will exceed the amount, what i am saying is that say you got a contract that you know was going to put you over the limit and decided not to register they could argue that you you should have known and should have registered, and they can get the vat of you, that said all it will do is reduce your sales, and reduce your income tax bill, they will either be taking it off you at 20% or the higher rate


  • #5
    swanvill
    Registered Users, Registered Users 2 Posts: 276 ✭✭swanvill


    If your customers are able to reclaim VAT, then registering and charging them VAT should not be an issue for them. If you register then you should be able to reclaim vat on purchases/expenses etc. Then registering would be the easiest option.

    If your customers are not able to reclaim VAT, then you should do a rough projected turnover figures and calculate if you are going to exceed it by a couple of thousand, if yes then you should consider registering, the worse case would be if you did not charge customers VAT and the revenue ask you to pay the VAT over, a lose - lose situation.


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