30th June 2009, 03:15 PM
I completely agree with Dr Wardle. Get some advice. HMRC run free courses on VAT as well as ones on tax and NI for small businesses/self employed. You can also get a lot of information from your local business link (or equivalent) as well as free/cheap one to one sessions.
If you are registered for VAT you have to charge it on your bills and then pay it on to HMRC minus the VAT that you have paid out to other people. You can do this on actual or on a 'flat rate'. I don't know much about the flat rate as it's been introduced since the last time I had to register for VAT, but I gather it's a percentage of your turnover based on the average VAT offset for your particular industry. I have no idea what that is for archaeology, or how they would be able to sort it out with such a likely small sample size. On the plus side you don't have to work out your VAT return to the penny. Either way, if you're registered, you're working as an unpaid tax collector.
The other downside of VAT is VAT inspections - they come out and go over your books. On the plus side, the only time I was involved in that they gave us some money back!
So, some clients like you to be VAT registered because they can offset your VAT against their return to HMRC. Clients who aren't registered prefer you not to be as you are 15% cheaper. (And to whoever asked - VAT is 15% at the moment, but goes back to 17.5% later this year - can't remember when!)
Taxable Supplies in your 1st quote is the total of the money that you have invoiced/billed/whatever elase you want to call it. So if you are passing on the cost of (for example) machine hire, yes you have to include that in the calculation.
I found HMRC quite nice when I ask questions. My main gripe is that I cannot claim courses/training the relate to setting up a business (which will pay tax) back against tax. Seems counter-intuitive to me!
(HMRC - Her Majesty's Revenue and Customs)
If you are registered for VAT you have to charge it on your bills and then pay it on to HMRC minus the VAT that you have paid out to other people. You can do this on actual or on a 'flat rate'. I don't know much about the flat rate as it's been introduced since the last time I had to register for VAT, but I gather it's a percentage of your turnover based on the average VAT offset for your particular industry. I have no idea what that is for archaeology, or how they would be able to sort it out with such a likely small sample size. On the plus side you don't have to work out your VAT return to the penny. Either way, if you're registered, you're working as an unpaid tax collector.
The other downside of VAT is VAT inspections - they come out and go over your books. On the plus side, the only time I was involved in that they gave us some money back!
So, some clients like you to be VAT registered because they can offset your VAT against their return to HMRC. Clients who aren't registered prefer you not to be as you are 15% cheaper. (And to whoever asked - VAT is 15% at the moment, but goes back to 17.5% later this year - can't remember when!)
Taxable Supplies in your 1st quote is the total of the money that you have invoiced/billed/whatever elase you want to call it. So if you are passing on the cost of (for example) machine hire, yes you have to include that in the calculation.
I found HMRC quite nice when I ask questions. My main gripe is that I cannot claim courses/training the relate to setting up a business (which will pay tax) back against tax. Seems counter-intuitive to me!
(HMRC - Her Majesty's Revenue and Customs)