moneywhisperer
Registered User
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- 3
Hi,
I’m setting up a small online side business that’s been designed to scale up easily and I’m unsure about what way to go about foreword planning for VAT charges to customers.
However:
Do I just register for VAT now and suck up the extra paper work, despite this being, initially, a rather small side business registered as a sole trader?
A possibility I’d thought of was to list the price as my combined ideal price plus VAT, without any mention of tax being added, nor registering for VAT. If I hit the VAT threshold, I then register for VAT and start paying it, having the bonus of getting a little more money per purchase in the initial year or two. The customer will then feel as though the price is unchanged.
The downside is that I cannot cater to those who want to provide a VAT number and that some of my competitors are listing their price as ex vat, giving the illusion of being cheaper.
I’d imagine that I cannot list the price as cost + vat and just keep the additional vat price charged until I reach the threshold? At the very least, it feels misleading and I want to avoid selling to customers at a cost higher than they need to pay.
Any advice appreciated.
I’m setting up a small online side business that’s been designed to scale up easily and I’m unsure about what way to go about foreword planning for VAT charges to customers.
- I don’t foresee the first year or two reaching the threshold required to charge VAT
- I want to provide a consistent price to customers and don’t want to suddenly up the price once I start charging VAT
However:
- Some of my customers will have their own VAT numbers and I’d like them to be able to purchase the service cheaper. They’ll likely be looking for this option.
- I don’t want to come across as too fresh faced and would like to give an air of an established business without resorting to anything untrue. I feel a description of VAT charges and the ability to provide a VAT number may be important to this.
Do I just register for VAT now and suck up the extra paper work, despite this being, initially, a rather small side business registered as a sole trader?
A possibility I’d thought of was to list the price as my combined ideal price plus VAT, without any mention of tax being added, nor registering for VAT. If I hit the VAT threshold, I then register for VAT and start paying it, having the bonus of getting a little more money per purchase in the initial year or two. The customer will then feel as though the price is unchanged.
The downside is that I cannot cater to those who want to provide a VAT number and that some of my competitors are listing their price as ex vat, giving the illusion of being cheaper.
I’d imagine that I cannot list the price as cost + vat and just keep the additional vat price charged until I reach the threshold? At the very least, it feels misleading and I want to avoid selling to customers at a cost higher than they need to pay.
Any advice appreciated.