what rate of vat should i be charging

M

msher

Guest
i am starting a boiler servicing business in the new year,will be replacing small value maintanence parts to mainly domestic users,should i be charging 13.5 or 21% o and is it worth my while registering for vat and if not how do pay vat,will certainly be under threshold,
 
If you are under the threshold, there is no need to register; if you are not registered, you cannot charge VAT.
 
If you are under the threshold ( €37,500 sales in continuous 12 month period ) and if most of your customers are not VAT registered ( e.g. domestic customers) then you will most likely be better of not registering for VAT.
 
Revenue have a helpful A-Z index of services / goods and applicable vat rates. [broken link removed]
 
thanks for the replies guys,so i presume i should only register if i am buying a van or a whole boiler units it would make sense to register or will i encounter problems with some people looking for a vat no
 
It depends on a couple of different things.

  1. What is your estimated turnover? If it's greater that €37,500 per annum then you have no choice but to register.
  2. Who are your customer? If your customers are other VAT registered businesses i.e. commercial or a contractor then it's sensible to register for VAT because it's all VAT neutral. If your customers are the general public, it may be advantageous not to register for VAT because they are not in a position to reclaim VAT.
VAT on the supply of labour is 13.5%
VAT on the supply of materials is 21.5%
If the total amount of the invoice is more than 2/3 made up of material, then the entire invoice is at 21.5%. Beware of the 2/3 rule.

Either way, I suggest you hire an accountant before you start and ask them about the 2/3 rule.
 
thanks for the info censuspro,it will be new customer base so will definatly be under threshold.starting from a year unemployed so forced to keep everything tight as no available money so no accountant for a while,decided not to register for a while as all my customers targeted will be domestic so i presume i just invoice them without vat
 
msher said:
decided not to register for a while as all my customers targeted will be domestic so i presume i just invoice them without vat
Click to expand...

Once you are not registered you cannot charge VAT. Any VAT you have paid as part of your costs simply becomes part of the overall cost of materials you charge out.
 
thanks graham 07,it should make my own bookeeping for a while
 
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