New Business VAT Query

dinevalesco

hi guys,

i'm just started my own graphic design & printing business.
i've registered my company with the CRO but haven't gone down the road of registering for VAT.

my question is this:

my client (mr. x) has come to me asking to get some things printed.
so, i got him a quote from a third party printer (mr. y) for, let's say €1000.
now, i've sent the quote to mr. x including 21% VAT (which i'm going to be charged for by mr. y), plus my own mark up.

what happens if mr. x wants to claim back the VAT on the job?

thanks,
ronan

dbran

Hi

Mr X cannot claim any vat back because you are not a VAT registered trader as you do not have a VAT number.

If you actually charge him VAT when you are not registered for VAT then you will owe the revenue for the VAT that you charged.

Kind Regards

dbran

dinevalesco

thanks dbran.

a related follow up question, if i may :

mr. y is charging me VAT at 21% and i'm passing it on to mr. x - should i just absorb the VAT myself and not pass it on to mr. x?

spoonface

dinevalesco wrote: »

thanks dbran.

a related follow up question, if i may :

mr. y is charging me VAT at 21% and i'm passing it on to mr. x - should i just absorb the VAT myself and not pass it on to mr. x?

If you're going to absorb VAT on an ongoing basis, that'll really cut into your margins. Probably best work out whether most customers will be business or consumer. If business, then maybe you should register for VAT soon.

I've been doing my own VAT returns for years and it really isn't much hassle, you only have to file a return every 4 months and one at the end of the year. You'll need to decide whether to return on an invoice or cash basis if you're going to register for VAT.