VAT chargable on consulting services?

Question

I am starting a PR Company and many of the services I'll provide will be consulting and advisory services.

Can these in any way be tax exempt? Will VAT have to be paid on all such services once the Company is VAT registered?

Answer 1

The threshold this year is about 64k. Do you really want to earn over that each year and give 17.5% to the goverment each quarter. Vat works well for retail and catering as you have to buy stuff with vat included which you can claim back, but for services I would try to keep out of it.

Answer 2

I woudl recommend checking the VAT government website and maybe becoming vat registered, it takes appro x 3 months...

if you are starting a business, you may have expenses and that also means you will be paying vat..

so you may need to claim this back..

Answer 3

The others are right - you only need to be VAT registered if you go above the threshold.

I run a VAT regd consultancy - and all consultancy work i do is VAT registered.

I am however on the flat rate scheme which is good in that i claim VAT from my clients at 17.5% but pay it back to the VAT people at 11% so thats good!! Only downside is that I cant claim any VAT back for my purchases or services where I pay VAT out.

Answer 4

Any business that is required to charge VAT, must register for VAT,( in order to claim it back, for payouts made you must be registered  , if they have a turnover of less than £45,000 annually,you can claim all VAT back from petrol to paper, ), ),  you are also required to charge VAT on services, as well, that you supply, but if you make more than the threshold amount you can not claim it back, VAT registration is not something that is done for people only on a certain income, it is a requirement of law, for all enterprises they are required to charge this tax, some of the prior people are mislead, and will find a knock on the door someday soon, for this ignorance.

Only children's clothing and books or newspapers/periodicals, are exempt, in effect, the government is using business as tax collectors for this tax, and woe betide any who fail to carry out this responsibility,   you VAT register when you start any business, not when you are beginning to make money, by then you will be in debt to a substantial degree, and the taxman has the power to do an assessment of your income, without any recourse to courts, or the law, they have this entitlement, be warned....lastly, the tax evaluation figure is that of a turnover for a business  less than £1750 a week, is more likely to be subject to VAT investigation, and they make take up to 6  years to complete, and also be subject to 6 years backdating.....

Answer 5

The VAT registration threshold is in excess of £45000 now so unless you reckon you are going to make that in your first year don't worry about it.