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Under VAT threshold but dealing with Multinationals

  • 27-10-2014 9:58pm
    #1
    Frere Jacques
    Registered Users, Registered Users 2 Posts: 206 ✭✭


    Hi all,
    I've searched the boards for this one but no luck.
    I've been researching a manufacturing idea I have, a lot of which would be custom stuff aimed at the hobbyist side of things, i.e. individual customers who would not be registered for VAT.
    However whilst discussing this idea with a few friends, two of them who would have decision making roles in their companies, told me that their companies would certainly be interested in my products. One works for a multinational, the other for a state agency. The guy who works for the multinational said I would probably need to be registered for VAT to work with them.
    I had hoped on turning over about 30K a year to individuals but with a potential foot in the door to larger companies, this could increase to 45K. My fear is that by registering for VAT, I lose a large amount of my competitive edge when dealing with the smaller customers.
    So that's the background and what I need to know is, Do I become a headache for a multinational if I'm not VAT registered? Do you think it's so much of an inconvenience that a company wouldn't bother dealing with me. I really don't want to have to add 23% to my fees to all the small guys.
    I don't think its about wanting my cake and eating it, just will established businesses want to deal with me without a VAT number.
    Any experiences in this or advice would be greatly appreciated.
    Cheers,
    FJ.


Comments

  • #2
    Pawwed Rig
    Moderators, Category Moderators, Home & Garden Moderators, Recreation & Hobbies Moderators Posts: 22,430 CMod ✭✭✭✭Pawwed Rig


    It should technically be easier for them as they want a VAT number so they can recover the VAT but if they are not paying it in the first place then there is less of an admin burden. It will depend on how competent their purchasers are really. We issue invoices all the time as VAT exempt or zero rated so can't see it being too much of an issue tbh.


  • #3
    Frere Jacques
    Registered Users, Registered Users 2 Posts: 206 ✭✭Frere Jacques


    Cheers Pawwed,
    I'll say that to him and ask him to clarify it with someone from accounts informally.
    Thanks for the reply. I means a lot getting a bit of feedback from folks who have done this stuff when you are starting out as I don't fancy looking like a complete plonker to someone in his finance department.


  • #4
    Alan Shore
    Registered Users, Registered Users 2 Posts: 735 ✭✭✭Alan Shore


    As the previous poster has said VAT is irrelevant to a VAT registered customer.

    Sometimes I think companies have a policy of dealing with VAT registered suppliers as it's a clear indication of scale.


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