Startup Q's

tombull82

Hi Guys/Gals I'm in the middle of setting up my new startup, but I am going to try a 1~2 month trial locally around Carlow before full startup,

1.I was wondering do I have to Reg for VAT straight away as I am only in trial mode? is there some sort of trial period to test a business?
(I know I could just tell my customers that its currently on trial but I don't want it to look very novice.. My customers will be mainly Business's.)

2.I want to buy a Laptop and signage etc, But I've been told I can't claim these as expenses as they would be purchases before I Reg'd for VAT.(that doesnt make sense! what If I was dealing with public and did'nt need meet the threshold? surely I still be able to claim expenses)
I've reg'd a business and Domain name, Can I claim Expenses from that date?

3.I'm working FT at present so paying Full PAYE, I assume I can just look after my business accounts seperate and let the accountant look after the Tax returns at the EOY etc? or will this affect how my accounts have to be done?

number 1 been the most important,

Thanks

kenbrady

tombull82 wrote: »

Hi Guys/Gals I'm in the middle of setting up my new startup, but I am going to try a 1~2 month trial locally around Carlow before full startup,

1.I was wondering do I have to Reg for VAT straight away as I am only in trial mode? is there some sort of trial period to test a business?
(I know I could just tell my customers that its currently on trial but I don't want it to look very novice.. My customers will be mainly Business's.)

2.I want to buy a Laptop and signage etc, But I've been told I can't claim these as expenses as they would be purchases before I Reg'd for VAT.(that doesnt make sense! what If I was dealing with public and did'nt need meet the threshold? surely I still be able to claim expenses)
I've reg'd a business and Domain name, Can I claim Expenses from that date?

3.I'm working FT at present so paying Full PAYE, I assume I can just look after my business accounts seperate and let the accountant look after the Tax returns at the EOY etc? or will this affect how my accounts have to be done?

number 1 been the most important,

Thanks

1. Why don't you want to register for vat straight away ? Customers are businesses so they will be vat registered

2.
Laptop will be a capital item so you can't claim it as expenses, it will be capital allowances at 12.5% per year.
Signage will be an expenses.
You can claim them as expenses, but you can't claim the VAT back before you are registered.

3. Yes you can keep them seperate no need to tell employer

dbran

Hi

Regarding 1) as 2) and 3) have already been answered.

You do not have to register for VAT unless your turnover net of VAT is greater then 37.5K for services or 75k if you are selling goods.

I personally do not recommend you register for VAT unless you have to as the cost of admin and hassle far outweighs any benefit you would gain from claiming back VAT.

There is a valid argument which says that a VAT registered person gives an impression to the customer that you are here to stay and are committed to your business. This is a marketing argument that you need to decide on.

Either way you must register for income tax and pay tax on the profits your business earns.

Hope this helps

dbran

Sonnenblumen

dbran wrote: »

Hi



I personally do not recommend you register for VAT unless you have to as the cost of admin and hassle far outweighs any benefit you would gain from claiming back VAT.

There is a valid argument which says that a VAT registered person gives an impression to the customer that you are here to stay and are committed to your business. This is a marketing argument that you need to decide on.


dbran

Doing a VAT3 return every 2 months is an absolute doddle, even for a new small enterprise, which more likely be entering purchases and sales on an MS Excel spreadsheet. Being able to reduce all Purchasing costs by reclaiming VAT @ 13.5% - 21.5% on Purchases will not only reduce costs of sales but would more than justify the modest admin effort involved and therefore very worthwhile.

A VAT registered business is generally more established, better organised and probably has the know-how to handle some level of corporate admin. So to put this up as a marketing differential is probably being a little disingenuous?

tombull82

kenbrady wrote: »

1. Why don't you want to register for vat straight away ? Customers are businesses so they will be vat registered
2.
Laptop will be a capital item so you can't claim it as expenses, it will be capital allowances at 12.5% per year.
Signage will be an expenses.
You can claim them as expenses, but you can't claim the VAT back before you are registered.

3. Yes you can keep them seperate no need to tell employer

2/3
Thanks,

I was just contemplating whether or not to reg during my trial period as it might add some extra delay if I have to wait for the paper work to come back and also I would probably be doing very little business during this period while I am "getting a feel" for the responses to the service/product.

Also I was under the impression that there may be some sort of system in place for doing market trials, that meant you didnt have to Reg fully while the trials were ongoing.

But I think I'm best off just going ahead and registering as I will be buying my materials from businesses and also selling my product/service to businesses

tombull82

dbran wrote: »

Hi

Regarding 1) as 2) and 3) have already been answered.

You do not have to register for VAT unless your turnover net of VAT is greater then 37.5K for services or 75k if you are selling goods.

I personally do not recommend you register for VAT unless you have to as the cost of admin and hassle far outweighs any benefit you would gain from claiming back VAT.

There is a valid argument which says that a VAT registered person gives an impression to the customer that you are here to stay and are committed to your business. This is a marketing argument that you need to decide on.

Either way you must register for income tax and pay tax on the profits your business earns.

Hope this helps

dbran

I will hopefully be "rapidly" raising to those thresholds, after its implemented fully.:)

tombull82

Sonnenblumen wrote: »

Doing a VAT3 return every 2 months is an absolute doddle, even for a new small enterprise, which more likely be entering purchases and sales on an MS Excel spreadsheet. Being able to reduce all Purchasing costs by reclaiming VAT @ 13.5% - 21.5% on Purchases will not only reduce costs of sales but would more than justify the modest admin effort involved and therefore very worthwhile.

A VAT registered business is generally more established, better organised and probably has the know-how to handle some level of corporate admin. So to put this up as a marketing differential is probably being a little disingenuous?

Sonnen

The initial VAT returns are every 2 months and then I can opt for annually or 6 monthly is this correct?

I would be using Excel as a tracker but would you be aware of an open source program which you could recommend for me?

adrian.s

tombull82 wrote: »

Sonnen

The initial VAT returns are every 2 months and then I can opt for annually or 6 monthly is this correct?

I would be using Excel as a tracker but would you be aware of an open source program which you could recommend for me?

You could use excel, but maybe check out some of the basic accountancy packages that will generate the report for you each 2 months. At least then you'll have that information feeding into the overall accounts and keep your admin costs very low. VAT is one of these things that can become quite complex on you very quick if you're not properly managing it.

Personally, I use xero which works out at about 20 quid a month and I find it invaluable in tracking the financial status of the business.

HTH,
Adrian.

tombull82

adrian.s wrote: »

You could use excel, but maybe check out some of the basic accountancy packages that will generate the report for you each 2 months. At least then you'll have that information feeding into the overall accounts and keep your admin costs very low. VAT is one of these things that can become quite complex on you very quick if you're not properly managing it.

Personally, I use xero which works out at about 20 quid a month and I find it invaluable in tracking the financial status of the business.

HTH,
Adrian.

Thanks Adrian, that seems reasonable enough I'll have a look into Xero.