[HesterF]

This is all very interesting. I've just registered as a sole trader for two parts of our smallholding - holiday cottage and vineyard (i.e. the potentially profitable bits). I've also registered for VAT and did my first return in November and am just preparing my second one now. The reason for registering was that we can get all the VAT back for the building work on the holiday cottage and the vineyard set-up costs. I did phone up and ask and all seems to be OK - there was no mention of a five year limit BUT before they paid my first VAT claim, they were quite thorough in checking me out including wanting to see a business plan, a list of all the receipts included in my claim and copies of the top five by value. They also phoned up our builder and apparently gave him quite a grilling on our plans. We will be making a profit within the year but it will take about twenty years for them to get their money back which I thought they would question but seemingly it's OK. I imagine they'd have a problem if I waited a year and then asked to deregister!

The vineyard was a bit of a lucky break because when I initially asked about that on its own I was told I couldn't register that for VAT until we were ready to be in business properly i.e. selling wine but when I went into the details for the holiday cottage, I found out that we couldn't reclaim VAT for services received more than 6 months after the service was delivered. So by the time we produce wine, we'd have been miles beyond the point of being able to reclaim the costs of planting the whole thing in the first place (most of the cost is in the labour). By rolling the two into one business, I've been able to reclaim all of those costs now.

I haven't included other smallholding stuff in the business and my understanding was that that was OK although I must admit I didn't go into a great deal of detail with them over it. I sell eggs and honey which are both zero rated but also poultry which I'm not sure about? None of it makes a profit and the sums involved are tiny so I don't imagine they'll lose much sleep over it....

H

[greenbeast]

I think you're right Garmoran, If you register for VAT as a sole trader then yes you would have to charge VAT on everything you sell, at the relevant rate, even if you're running two unrelated businesses (smallholding and computer repairs for instance).

Since if you're a sole trader, it's the individual who registers for VAT, I think


[/color]

Sorry for dragging this up but it could be useful information for someone



VAT applies to 'persons' but a partnership, and other corporate bodies are persons in the eyes of the law.
I have registered our partnership (we are farming pigs and selling the meat) for VAT and am filing monthly returns (only in second month and not had any of our money back yet).
However i also have a blacksmithing business which i have no intention of including for VAT purposes as that is me as a sole trader.

[SallyintNorth]

Just in case it's relevant... our neighbour is a dairy farmer and cheesemaker, so is of course registered for VAT for the farm business. 

They also have a farm shop and café and used to do B&B as well.  They assumed it would be okay to be not VAT registered on the B&B side but were disabused when they had an inspection.

[pointer]

Hi folks
I started this thread last year, so hope I'm allowed to revive it!
Folowing the advice given and my own research, it seemed sensible to register for VAT, which I did last June. However, I'm only now finally getting round to gathering my past 3 years' receipts etc to do my first return. The online form is showing seven monthly periods as "Open" for a return - which one do I pick for my first return? Is it the first one following my registration, or can I jump straight to the most recent period and ignore these others?
Thanks

[Womble]

Hi Pointer,

I am not an accountant, and as per my earlier post in this thread, I'm still trying to figure all this out for myself. However, I'm sure you should really have started submitting returns from last June onwards. I'm actually very surprised you haven't had a letter about it yet (my other business was two weeks late with a return once due to a computer glitch and we received a very sternly worded missive from HMRC!).

I think you'll need to put in the return for the previous 3 years and the three months to the end of June, then seven more (if monthly) covering the receipts for each month since then. Do get yourself a good accountant to advise you though.

[bazzais]

Its not screwing the system to claim more VAT back in any shape or form - this is a tax for luxury items aimed at consumers and basically screws businesses that are unregistered out money they need to earn a living.