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podowd said:Hi,
the decision to register for VAT should be dictated by the amount of VAT you might be able to reclaim rather than dismissing it purely on the basis of having a low turnover.
podowd said:Regarding the decision of getting an accountant, it's about weighing up the costs versus benefit. If the benefit of having a good accountant (the emphasis being on getting a good one!) means less time spent on admin and lower tax bills because of good advice then it's worth paying an accountant. If the cost of the accountant exceeds the value of the time/tax savings then don't use an accountant!!!
podowd said:- if you are engaged in a supply of taxable services and your turnover does not exceed the registration threshold you are fully entitled to register on a voluntary basis in order to reclaim vat incurred on business expenses.
podowd said:Also, if you have a turnover of 10k per annum you will charge VAT on that so you will pay VAT of 2,100 (assuming your service is taxable at 21%). The only way you would reclaim more than that in VAT is if you had incurred costs of more than 10k plus VAT, in which case you'd be making a loss and you probably wouldn't be in business!
podowd said:Whilst the Revenue do have this power this is used in cases where the trader voluntarily registers for Vat and then wishes to deregister and is trying to be clever about reclaiming VAT on purchases without paying VAT on sales. The Revenue would obviously frown on this and would use their powers to reclaim the VAT credits that have effectively been obtained ona fraudulent basis. If there is a cessation of business in the normal course of events (e.g. lossmaking business) it is very rare for them to seek to reclaim the VAT unless they feel the VAT credits have been have been obtained fraudulently.
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