[netmgr]

Hi folks

I'm thinking of putting in a grant request via CCAGS for a shed and there's been a suggestion that I would benefit from being VAT registered even though I'm below the threshold?

I think this will do more harm than good as I will need to charge VAT on my lambs in the future - Id assume the price im paid would be the same but id have to give away 20% back to the government?

any thoughts?

[Rosemary]

We registered voluntarily and we're net reclaimers - most of what we sell is zero rated (eggs, beef, lamb) but we can claim back the VAT on purchases, which in the four years we've been here have been pretty substantial as we've invested a lot of capital in the business - fencing etc.

We have a simple bit of software that does the VAT return at the click of a button.

[netmgr]

ahh so the lambs we sell are zero rated anyhow, seems like a win win situation

[Hamish Crofter]

I recently had a successful CCAGS claim. Being vat registered makes no real difference as far as CCAGS is concerned. If it's your first claim they will send you an HMRC form to complete ( very simple) to confirm you are or are not vat registered.
Obviously if you are registered they deduct the vat from your claim.

[Hamish Crofter]

Rosemary,
Can I ask, if most of your produce is 0% rated are you still able to claim the full 20% VAT back on your purchases or are you only allowed a reduced rate back?

I'm thinking of registering as I think it may be benificial for the things like you mention, fencing, buildings, a new pick up truck!
Thanks

[netmgr]

I recently had a successful CCAGS claim. Being vat registered makes no real difference as far as CCAGS is concerned. If it's your first claim they will send you an HMRC form to complete ( very simple) to confirm you are or are not vat registered.
Obviously if you are registered they deduct the vat from your claim.

But if you were VAT registered my understanding is you would be able to claim back the vat on your part of the payment.

[Hamish Crofter]

As I say being vat registered or not makes no difference to eligibility and payment. I'm not registered so got the full amount  (50%of the cost) taking into account the VAT I had to pay. But yes as you say you should be able to claim it back if your registered.
If you give your local SGRPID office a call they will tell you.

[netmgr]

As I say being vat registered or not makes no difference to eligibility and payment.

There was never any suggestion that I had to be, I said it was suggested I would benefit.

[Rosemary]

Rosemary,
Can I ask, if most of your produce is 0% rated are you still able to claim the full 20% VAT back on your purchases or are you only allowed a reduced rate back?

You get the full 20% back - it's been a godsend to us over the last four years and we've fenced and built and bought equipment.

[bloomer]

useful hint if you are VAT registered and you employ small tradesmen like me who aren't...


if you buy the materials directly you still get the VAT back and arrange a labour only rate with the tradesman...


trick taught to me by a local authority business manager who had hired me for some work, so must be perfectly legit :-D

[Hamish Crofter]

Great bit of advice, thank you!

Being VAT registered is looking more attractive by the day!

[oor wullie]

I take it that you have to be trading as a busness before you register for VAT?
I am not trading as a buisness as the egg money just 'dissappears' and have, so far, thought it not worth it as a  buisness will need to submit accounts which have to be signed off by an accountant at a cost of a few hundred pounds a year.

[Hamish Crofter]

I think you need to be registered as a business, yes. But from my experience that's cheap and easy to do. You are supposed to have an income or turnover of about £77k per year before you have to register for vat but as said here you can voluntarily register. I have an income as a consultant as well as the croft and so just registered myself as a business linking the croft with the consultancy. The reality is 99% of our income comes from the consultancy work but the croft benefits or will from the VAT deductions that we will be eligible for.

You are right about your accounts and accountancy fees, however these fees will be offset against your tax bill. Best thing I ever did was getting an accountant and registering as a limited company.  Most accountants will give you an initial free appointment. You can tell them your situation and they will tell you what's best for you.
I know it works for me but I'm still quite new to it all so I'm no expert so it would be best for you to see an accountant for advice.