Should it be VAT registered

S

sammieh

Registered User
Messages
48
Hi --Quick query, cannot find a direct answer to what i am looking for. but a friend of mine is in business for himself for the past six months, he is not VAT registered. Most of his work is domestic. the turn over for the six months in business was approx €35k-€40k max. there are alot of bills that he would be charged VAT for total approx €300min per month to €500. Should he be VAT registered. Many thanks for any help you can give.
 
Supply of goods - turnover €55,000 or more - has to register for VAT
Supply of services - turnover of €27,500 or more - has to register for VAT.

These are rates applicable from 1 May 2006 - may have gone up in budget.
 
Sorry, should have said above rates are for limits for 12 month period. Must register if turnover exceeds or is likely to exceed these limits in the following 12 months - looks like he should register.
 
I've always wondered what the big deal is if you don't register for VAT?

There's obviously some sanction but you're not defrauding the Revenue or your customers...does anyone know happens?
 
If tiy don't register for VAT when required you are defrauding the Revenue - they should get 21% (or whatever the rate is) of your turnover..............
 
sammieh said:
Hi --Quick query, cannot find a direct answer to what i am looking for. but a friend of mine is in business for himself for the past six months, he is not VAT registered. Most of his work is domestic. the turn over for the six months in business was approx €35k-€40k max. there are alot of bills that he would be charged VAT for total approx €300min per month to €500. Should he be VAT registered. Many thanks for any help you can give.
Click to expand...

Depends, not all services are Taxable, what's he doing? If taxable then registration thresholds will apply as per other posters
 
Andy Doof said:
I've always wondered what the big deal is if you don't register for VAT?

There's obviously some sanction but you're not defrauding the Revenue or your customers...does anyone know happens?
Click to expand...

You are breaking the law and are defrauding revenue.
 
bazermc said:
You are breaking the law and are defrauding revenue.
Click to expand...

How are you defrauding the Revenue?

If I work as a consultant and make say, 25K per annum I charge a client 200 Euro for doing something. No VAT.

If I work as a consultant and make say, 50K per annum I charge the same client 200 Euro plus VAT at 21%. If I wasn't VAT registered I'd just charge the 200 Euro. Where's the "defrauding the revenue"? It's merely a procedural error, an oversight. There's nothing overly dodgy!
 
Andy Doof said:
How are you defrauding the Revenue?

If I work as a consultant and make say, 25K per annum I charge a client 200 Euro for doing something. No VAT.

If I work as a consultant and make say, 50K per annum I charge the same client 200 Euro plus VAT at 21%. If I wasn't VAT registered I'd just charge the 200 Euro. Where's the "defrauding the revenue"? It's merely a procedural error, an oversight. There's nothing overly dodgy!
Click to expand...


It would be dodgy because the consultants competitors who have the same turnover of 50 k per year and who comply with the law have to pay a percentage of their turnover in vat to the revenue commissioners.
 
rabbit said:
It would be dodgy because the consultants competitors who have the same turnover of 50 k per year and who comply with the law have to pay a percentage of their turnover in vat to the revenue commissioners.
Click to expand...

Not true...VAT as the name implies is a tax on the "value added".
Nobody pays a percentage of their turnover in VAT...it was never their money to begin with. It's a percentage added on.
What's the difference between a supplier of services with a turnover of €27,500 and one with a turnover of €28,000? I've no issue with the fact that the rule exists...just with the term "defrauding"!
 
If you should be VAT registered, and are not, and are not collecting VAT and paying it over to the Revenue - the Revenue are not getting their VAT - therefore you are defrauding the Revenue out of the VAT
 
Thanks for your replies, looks like he should be VAT registered. I will pass the above info on to him.

Thanks
 
You must log in or register to reply here.
Back
Top