New business - sole trader

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will56

Registered User
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Hi I was wondering if I could get some advice please before I go engaging an accountant etc.

I am setting up a business.
I will be selling computer components and offering computer services
Customers will be regular consumers, unlikely to be selling to business at the moment
This is a side business to see how things go and earn a little extra income.

I will be registering the business name
I assume I will need to file accounts each year even if I don't make a profit/income ?

Should I register for VAT now ?
Turn over is likely to be under the threshold but are there other advantages to being VAT registered ?
I will be sourcing my components from the UK, if I have a VAT number I can buy parts Ex VAT.
If I'm under the threshold I can sell them on without charging VAT ?

I realize all this will be better answered and set up with an accountant but I'm just trying to have an idea before I go to one.
 
will56 said:
I will be sourcing my components from the UK, if I have a VAT number I can buy parts Ex VAT.
If I'm under the threshold I can sell them on without charging VAT ?
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No.
To get goods free of VAT (well, self charged - you pay the VAT here rather than UK) you need to be registered for VAT. Once registered, you must charge VAT, regardless of threshold.

For general advice, check if you have a local enterprise centre, or other body aimed at helping startups in your area.
http://www.citizensinformation.ie/e...sources_information_on_starting_business.html

john luc said:
a vat number is like herpes, once you have it you have it for life.
Click to expand...
You can cancel your VAT registration.
Unfortunately I can't help with the herpes...
 
you can cancel but if you ever look again for one years later it will still be there. I had one years ago and still years later I would get computer generated post looking for returns.
 
Okay, so I'm likely to stay small part-time I should forgo the VAT number.

Is there anything else i need to do at this stage ?

I am tracking and recording all spending, and the sales to date
 
Have you registered for Income Tax with Revenue. Open up a seperate business bank account. Keep all you purchases invoices and receipts. Invoice all customers for work done, a duplicate invoice book can be useful if you are calling out to customers. I would hold off on the vat registration unless you think you are going to be very close to threshold and see how it goes. If you had a lot of setup costs such as a van, equipment etc maybe you could register now but if you are in an overall refund situation with vat and you decide to deregister from vat in a few months you may have to pay this refund back.
 
I've only recently started, I currently advertising to get customers
I've had two sales that have been paid for using my own account.
I will set up a new account before the next customers
 
It does make extra work for an accountant at the end of the year Will if they have to reconcile your personal bank account with loads of transactions instead of your business one with just the relevant stuff
 
Keant1591 said:
It does make extra work for an accountant at the end of the year Will if they have to reconcile your personal bank account with loads of transactions instead of your business one with just the relevant stuff
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Good point, I'd thought of that alright
 
Keant1591 said:
It does make extra work for an accountant at the end of the year Will if they have to reconcile your personal bank account with loads of transactions instead of your business one with just the relevant stuff
Click to expand...

I just send a simple spreadsheet with sales\costs to my accountant, they don't ask of check bank account records. It does mean you have to be correct on your numbers as the accountant is doing the return based on your info.
 
john luc said:
a vat number is like herpes, once you have it you have it for life.
Click to expand...
So if someone had a (single employee) limited company 15 years ago as a contractor, but then went PAYE, technically they could, say, buy stuff off Amazon VAT free?
 
I know, I wouldn't do it, but it seems sloppy to me to allow it without any checks, or not to 'disable' VAT numbers once companies are dissolved.
 
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