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VAT help for new business

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  • 04-11-2010 11:30pm
    #1
    Mac71
    Registered Users Posts: 12 ✭


    A friend of mine is setting up their own business as a sole trader. He has registered for VAT even though he will not be earning anything near the amount needed to register. Can someone advise whether he has to charge VAT on his sales now that he is registered or can he claim VAT on his purchases or will the VAT 3 forms be nil?

    Also, his business activity will involve repairs, maintenance work. He will be carrying out work for another business. Will he have to issue this company with an invoice and if so what rate of VAT should he be charging or should he be charging VAT at all??

    Apologies for what may seem silly questions to some and thanking you's in advance for any replies!!!!!!
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    #2
    nompere
    Registered Users Posts: 1,677 ✭✭✭nompere


    Mac71 wrote: »
    A friend of mine is setting up their own business as a sole trader. He has registered for VAT even though he will not be earning anything near the amount needed to register. Can someone advise whether he has to charge VAT on his sales now that he is registered or can he claim VAT on his purchases or will the VAT 3 forms be nil?

    Also, his business activity will involve repairs, maintenance work. He will be carrying out work for another business. Will he have to issue this company with an invoice and if so what rate of VAT should he be charging or should he be charging VAT at all??

    Apologies for what may seem silly questions to some and thanking you's in advance for any replies!!!!!!

    If he's registered he must charge VAT on all his sales.

    He claims back all the VAT that other people charge him.

    He must issue an invoice to the customer - and if that customer is registered, as seems likely, then him being registered saves him money because of the credits he gets from his purchases.

    Rates vary - he needs to look up his business on the Revenue website - this is a link to a comprehensive list of rates: http://www.revenue.ie/en/tax/vat/rates/index.jsp


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    #3
    Mac71
    Registered Users Posts: 12 ✭Mac71


    Thanks for the reply.

    Just one last question. If he has alot of non registered customers does the above still apply with him charging them VAT too??


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    #4
    MBateson
    Registered Users Posts: 169 ✭✭MBateson


    Yes, he must charge them VAT.


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    #5
    doctorg
    Registered Users Posts: 551 ✭✭✭doctorg


    Just a question regarding Vat.

    I have registered a new business as sole trader but I have not yet registered for vat as my turnover won't be 35,000.

    But My question is can i claim vat back on any products I buy for the business?


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    #6
    ResearchWill
    Closed Accounts Posts: 4,111 ✭✭✭ResearchWill


    Can I ask why do people knowing the risk still set up business as a sole trader and not limited liability.

    I am not allowed because of the business I am in to set up limited liability wish I could. But I deal every day with people who have not taken advantage of limited liability in setting up business and are buggered.


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    #7
    doctorg
    Registered Users Posts: 551 ✭✭✭doctorg


    ResearchWill wrote: »
    Can I ask why do people knowing the risk still set up business as a sole trader and not limited liability.

    I am not allowed because of the business I am in to set up limited liability wish I could. But I deal every day with people who have not taken advantage of limited liability in setting up business and are buggered.

    Well our business is in its infancy and we really don't need any loans or anything as long as we have our computers.

    But i would image, as the business would expand we would turn to a limited company.

    in the meantime can you answer my question regarding VAT :)


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    #8
    ResearchWill
    Closed Accounts Posts: 4,111 ✭✭✭ResearchWill


    doctorg wrote: »
    Well our business is in its infancy and we really don't need any loans or anything as long as we have our computers.

    But i would image, as the business would expand we would turn to a limited company.

    in the meantime can you answer my question regarding VAT :)

    If not registered cant claim. There are exceptions to that rule in relation to the 6 months prior to registration, but your accountant can explain that.

    In relation to most business problems it's not loans as most banks require personal guarantees in any case. It is unexpected uninsured litigation that is the problem.


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    #9
    doctorg
    Registered Users Posts: 551 ✭✭✭doctorg


    ResearchWill wrote: »
    If not registered cant claim. There are exceptions to that rule in relation to the 6 months prior to registration, but your accountant can explain that.

    In relation to most business problems it's not loans as most banks require personal guarantees in any case. It is unexpected uninsured litigation that is the problem.

    Can i just ask you, our business is to just to make websites. And so far I have just register the Company on CRO. I have not registered for VAT as the turnover need to be 35K. Is there any other thing that I need to do or are we all set for business

    Thanks


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    #10
    ResearchWill
    Closed Accounts Posts: 4,111 ✭✭✭ResearchWill


    doctorg wrote: »
    Can i just ask you, our business is to just to make websites. And so far I have just register the Company on CRO. I have not registered for VAT as the turnover need to be 35K. Is there any other thing that I need to do or are we all set for business

    Thanks

    You can register for VAT even if turnover less than the required amount. The advantage of this in your case is I assume a lot of VAT expenditure will be made in the first year.

    In relation to any other steps best to ask accountant or solicitor.


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