Going VAT Registered?!-Electrician
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- čas přidán 26. 04. 2021
- Is the other part of the clip from last week with a SD card so second part of Monday club talking about going VAT registered,
here's the link to the full episode. • MARK "THE BOSS" ALLISO... - Jak na to + styl
I don’t know if you’re going to see this mate, I’m probably about to get a little ahead of myself but I feel it’s worth saying and you deserve to hear it. I’ve known you from afar for a good while (you were good mates with my big bro at school) and we got talking about you one evening and ever since I’ve been subscribed and keeping up with your videos. As a person, as a young business man, as a role model to a younger man or indeed person, it has to be said Nick - you’re an absolute trooper. To see your work ethic, your achievements both big and small, your transparency & honesty - it’s impossible to wish you anything but the best. You’ve carved a path and made it your own, as a small business owner full of the same fears and doubts, it’s somewhat comforting and reassuring to hear it from someone else, a little further along the line than I, that it’s not just me with those fears & doubts. And to realise in hind sight, 9 times out of 10, the fears and worries weren’t worth the energy and the success always followed the hard work. I just want it to be said, you really are inspiring my man, you’re a pleasure to watch & follow along with and like I said, I wish you all the best with everything because you are a complete and utter trooper! Happy & proud to see you succeeding big bro 🙏 TG
I've been known to pick contractors who are VAT registered over non VAT. I know it's weird but I often see it as a sign of how solid the firm is.
You'll be fine Nick and its a big accomplishment, a testament to you!
Go for it! It’s a no brainer! 👍
Did it for my business last month
"And 2... why you got footballs on your ears?" 😆
Good video... cheers 👍
Was vat reg for 15 years, now de-registered, more paperwork and a non paid tax collector, on the up side claiming back the vat on materials and expenses. One word of advise from me is to make sure you save the vat to pay every quarter, it’s harder than you think. Open a separate bank account with a direct debit just to save the vat money. Good luck nick.
This is what i do, I have a savings account with my normal business bank account, when an invoice gets paid I transfer the VAT amount into that account, I've seen others spend the VAT money and get stuck when it comes to paying it back!
You have put all the effort in do what makes you happy brother.
I wanna be able to create a business like you as I grow👍🏻 absolutely smashing it mate, I’m 21 and learning kitchen an bathroom fitting currently and what you have achieved and how you’ve done it is literally everything I dream of, plus one day a 6 figure year 🤩
Love these videos nick. Im a qualified electrician and heir to the throne of my dad's company (small domestic/commercial company in Belfast). I'm asking myself these questions all the time and thinking about the same things as you in terms of 'what the next step is' & how to grow my business. The videos are very helpful and it's nice to resonate with people in the same position. Keep up the good work mate!
Best thing I ever done 7 years ago now. Good luck mate
Working for yourself brings up so many things other people don't think about. Do I hire someone to ease my workload? What if my workload drops? Should I start charging more? Will it drive away customers?
When I was at my peak, I increased my rates. My regular customers kept sending me orders and I even took on new customers who said they hadn't used me before because they thought my rates were too low for the quality they expected. It was a scary step, but worthwhile.
I'm retraining to become an electrician soon and watching your vlogs definitely gives me some perspective.
Good luck bro 👍🏼
Love your vids keep them going
Mate as I said to you a week or so ago it’s the a scary step but the right one to take the company to the next step without limits. Treat it like the next chapter 👊👊👊
Thanks for sharing this with us take care
Never put your prices down , JUST GO FOR IT, your be fine, i done it 15 years ago best thing i done. got rid of the people that want cheep, and attracted the people that want to pay for a good job and service.
This is the problem I have. Some people just don’t want to pay for a decent job and service. But your right it does weed out the people who don’t realise your worth.
Mate I'm currently on the fence with regards to going full time self employed, and just sacking off my other job. This video has really helped me
Go for it was the best thing I ever did. Good luck to you on your journey. 👍🏼
I’m the exact same as you, been an electrician for 15 years always think of the worse outcome! I went VAT registered about 18 months ago and it is a big jump forward but definitely worth it from a professional perspective, like Jordan said “it’s a no brainer” I wish you all the success! And remember the positives always out weigh the negatives!⚡️💡
You'll never beat John Ward 🤣
Sounds like your ready to go for it! I bet if you look back to when you started you would never imagine you would be where you are now, I’ve been part time self employed for only 7 months now and it’s taken until now to get regular work, someday I’d love to be at the position your now in! 👍🏻
Go for it Nick. Best thing I ever did. Welcome to being a proper business. Side note far to many ads mate
Once you've done it, you'll wonder what all the fuss and stress was about.
If you have to charge VAT (output tax), that puts your price up for those that cannot recover it....ordinary consumers. However, you can claim most of your input tax (purchases).
You must keep proper records...When I ‘practised’ I used a spreadsheet...sooo much easier.
HM Inspector of taxes will audit you now and again...your input tax invoices must have your name on them and a tax point in the tax period. You can claim some of your input tax from your household services bills for office expenses. There are different rates of VAT.
Do NOT fiddle...they will lock you up.
It'll be a little more paperwork for you to do. The input tax you pay for goods can mostly be reclaimed on the other hand. Make sure you file all your receipts and digital invoices including fuel receipts etc. You might want to think about going limited if you already haven't. Ltd liability will help protect your personal finances and posetions should anything go wrong. We've been both Ltd and vat registered for about 12 years. If bookkeeping isn't your strong point then it's justifiable to employ an accountant. Good luck Nick 👍
Just gone registered myself. What a stress with existing invoices, quotes etc. That said once your up and running and all quotes and invoices are plus vat it is OK and I haven't lost work which was a worry.
Work breeds work. Good work breeds lots of work. I think most people had or have the same reservations as you do. Ultimately you will always be successful if you love what you do.
I’m afraid Nick the choice will eventually be made for you , so you might as well do it while you have the energy to cope with the extra work load. And as you decide later on in your career to reduce your work you can de register All the best and thanks for shearing 😀👍👍👍
Go for it Nick!
Been working with my dad for the last 12 years and him being vat since before I was born 😂
We loose out on the odd job because Mr No VAT is cheaper but like the comment said below, it’s an achievement and you should be proud!
Depends if all work carried out is domestic as VAT will be passed onto your customers which rises your prices which then as a customer puts them in position of possibly going with someone who is non-vat and will be cheaper - I suppose it's down to how many repeat customers you have etc and if they're happy .... If you're doing more commercial then YES due to other businesses being able to claim the VAT back which will possibly make your business more attractive and would get more work that way.
The other thing is the extra paperwork :)
Wish you all the best with it mate.
Don’t be worrying about the unknown, just go for it, go for anything. What’s the worst that can happen ? it fails and you go back to what you were doing before ? Not the end of the world is it.
Of course that won’t happen and in reality you’ll be glad you did it
Look at you now bro….the confidence and energy from doing this…. Top man.
I’m in a similar position to you, making that jump and taking somebody on in the books, holy crap how do I afford someone to be on £40k a year? But I’m also booked up for 6 weeks and I hate telling customers I can’t do this for 6 weeks. Having someone on board will allow me to drop that lead time and create more work. You just got to take the jump and see what happens. You’re smart enough to do it! So do it!
If you have a good accountant speak to them about Flat rate ! Some tradesmen go on this not many people know about it, but if you don’t claim much VAT back you just pay 7% on everything you earn, it works for some. 👍
This is a good point I was advised to do this but unfortunately my business is material heavy if your are mostly labour it might be a good shout.
I dreaded going vat registered but i can safely say its the best thing from an accounts point of view I do all my accounts quarterly in about three hours , no more spending a week of stress in january. My accountant told be if you go vat regustered there is no point bimbiling around 80k you have to go above 120k .
Trying to stay under the vat threshold means you have to reduce your rate which is nonsensical. My advice is get Sage accounting or the like and it will save a lot of hastle. PS Lot of people saying you get the vat back on materials. This is incorrect. You get it back on things that go into the business, like tools ☺
This is where from day, registration for VAT or GST where I am should be done from day one but you'll make it work
Great video mate :D It sounds like you're getting to the point you don't have a choice, but imo I think VAT registration will push you towards commercial work as that's where the most profit is (as it's essentially the same as you are now but you can claim the vat back) and some business' only contract with other VAT registered business', with domestic/small business you will have to put the prices up for customers or take a hit as you mentioned:
A £2500 gross job with £500 raw materials ex VAT atm costs the customer £2500 and you £600, after VAT registration it will either cost the customer £3000 (and you still gross £2500 after VAT) and you get another £100, or you keep it at £2500 (and gross £2083) and "lose" £300 odd in profit. I'm not an accountant so don't know the ins and outs but that's my naieve way of looking at it.
Also don't worry about not having work come in! Ift may sound insensitive but with a LTD company if everything went balls up it won;t ruin your life like it potentially would when you were a sole-trader.
EDIT: I didn't mean "push you towards commercial work as that's where the most profit is" in the sense it's probably read 😂 but I can't think of a better way of putting it
I am in a similar position, but can you tell me if youtube revenue not directly linked to your day to day business counts as annual turnover in your business ?
I remember many years ago, one job was going to take me close to the threshhold, I only deregistered a couple of months ago.
Just had to pay the VAT on the current value of my vehicle....forgot all about that !!! nearly 4K !
From memory, I thought if your earnings were projected to reach the threshold in that financial year,based on earnings to date, you had to register then as opposed to when you reach the threshold.
Or, you can register voluntarily, no matter how much you turn over.
@@Mr.MFuckingYTchangedmyname Of course, I missed that out, that has always been the case, I was referring more to when one has to register.
If you dont change your plant pot, you cant expect to grow!
If you do .just make shore every job you do .put the vat money in to a new account Because its not yours .if its left in your biss account good possibly you may use it .regards .rob .gloucestershire microwave services . est 1990. . good luck .Your work is brilliant.
Funny ..so many Trades are not VAT registred in UK ... In Belgium you have to be VAT registred when turnover ( not profit after expenses !!) is above 25K ( euro ) a year. So it's usually only for people do it as second job . Also reno jobs here ( rewire etc ) is only 6% VAT ..when house is older then 10 years .. 21% for new houses .. etc .
Your comment right at the end: “I need to earn an extra £37k to employ someone”.
Wrong: if you employ someone and pay them £37k then they need to be making more than £750 profit per week for you.
The biggest step is being brave enough to let them do work on their own in your name. If you can’t do that you’ll always be a one-man-band with helpers.
If you can, then you become a boss. M mentor. A leader. With the opportunity AND TIME to do other stuff.
I got the feeling he was talking about total cost of employment (NI, pension, holiday/sick pay etc), not the base salary being 37k. But I totally take your point about that extra person needing to be able to attend jobs solo so the company can do twice as much work, not the 1.2 or 1.5x that always having a helper with you allows.
@@stevepettifer4896 Still, an employee needs to brings in at least 2-3 times their salary (including their salary). A average rate for a young qualified spark is around £28K which means they need to bring in an excess of £60K gross profit.
Nick has a bad mindset thinking HE needs to make all these extra money where actually is the employee who needs to earn that money into the company for him to be a profitable asset
@@EruElectrics I know the figures required to hire an employee as I too have run my own business in the past, but what I took from what Nick said was that he is still thinking of himself and the business as one entity, which is fair enough and understandable as that has always been the case for him. He's not had a full time employee before so it's all new to him and therefore he might not have got all the ins and outs of that straight in his head yet. I'm sure if he does decide to expand he'll put more thought in and take advice. I'm sure he'll make mistakes too - we're all human after all - but I'm also sure if he does them he'll learn from them.
@@stevepettifer4896 fair enough, my worry is that because Nick at the moment has a bad mindset regarding prices and growth, the mistakes he may make could easily either ruin his career or make him work his arse off to make enough money to keep his head over the water.
Myself am on the process of hiring my 1st spark but I have brought the company to a stage that could run with minimum involvement from me.
@@EruElectrics hopefully he will take it all under advisement - he seems to be in contact with loads of people who should be able to steer him right, and he doesn't seem to be too impulsive. Would suck to see him make a howler of a mistake. Good luck with your hiring and expansion, hope it works out how you've planned it. Sounds like you've thought it through well.
If you have to charge VAT (output tax), that puts your price up for those that cannot recover it....ordinary consumers. However, you can claim most of your input tax (purchases).
You must keep proper records...When I ‘practised’ I used a spreadsheet...sooo much easier.
HM Inspector of taxes will audit you now and again...your input tax invoices must have your name on them and a tax point in the tax period. You can claim some of your input tax from your household services bills for office expenses. There are different rates of VAT.
Do NOT fiddle...they will lock you up. And they can gain access to your property immediately...and use Sheriff’s bailiff warrant.
I think you really need to be VAT registered
You sound like the kind of bloke I wanna work for, you have the balance between getting the money to provide for those you care for, and actually giving a damn about those you employ. Any jobs going...?
I once had a business, and had to become vat registered in order to get the businesses on board, however going vat reg makes you realise that you thereafter become a tax collector for the government - theres pros's and cons in that you can claim back vat as well on things your business needs. Sometimes in life you have to take the risk, otherwise you will not grow into whatever you could be, be smart, but also think big. I bet in 5 years and when you are a monster of a business, you will look back and think, should have done it sooner.
Nick, what would Batman do!
If you are going to expand I would advise being a Limited company also
I can't believe you can even think about avoiding vat when u have a unit / apprentice / van it's the next step simple as that and with reverse vat now in you will find it's a great time to do it esp if you work for builders / companies as they deal with the vat leaving you just to look after personal client's vat content and brucie bonus van materials back
Great video 😎
This isn’t the Nick therapy hour😂
He was proper pulling his face through out nicks story 😂
@@stuarthughes808 He always looks like like that 😂
I think you should all subscribe the Mark Allison. (Bottom left) I’m sure he will make some good videos when he gets his co worker on video.
It’s part 2 of your career , go for it The. Only way is up ....
Being VAT registered will make your proces look better to the company customers, such as agencies and industrial jobs. As your materials costs will be lower. Companies will claim the VAT back anyway. And agencies will be adding vat when they pass on your costs to the clients anyway.
Absolute no brainer. It should really be something that every self employed person does, level playing field. I went vat registered after going over threshold and it never cost me any work. It's not been an issue. Remember vat extra is on labour only, you already charge vat on materials so overall increase isn't a massive issue for domestic. Not only that you can claim vat back on so much.
08:47 pay someone 37K a year .. is making more then 37K extra profit .. at least here in Belgium .. social security / vacation / illness /retierment stuff etc .. hiring someone is expensive here ..
The VAT with my rate it was never a problem. People that aren't happy to pay an extra £16/h wouldn't use me even before the time I went VAT registered.
If your rates are still at the same level as I remember (low) then VAT will be even a smaller issue that could have been to me.
If you are thinking to hire because you are too busy I'd advice you to start raising your prices a few times. If you are on the lowest end of rates, bringing more people in will only make it harder to cope as a business.
Did you say you made a limited company? If you haven't I would recomend your do. The whole point of them is to reduce risk to encourage business's to start and grow. Some people use them to take the piss obviously. Albeit a bit more paperwork, it will take alot of your doubts and worries away from your shoulders for your company to go forward and grow.
It's good to question the reasons for the choices you make, but the longer you prevaricate the harder the decision becomes. It's also important to remember to question whether you're more likely to regret missing an opportunity or regret not succeeding....
Have a chat with your accountant, but if you set up another company that supplies materials & tool hire to your customers that’s VAT registered...
Can’t drop the price. What you would lose from a domestic market you will gain several fold in the commercial market if you chose to
Best and worst decision ever made, really helped but did irk a few home owners for the first couple years. Honestly it's always worth while going VAT and is a no brainer.
If you are a UK company that earns over £85,000 and you purchase your material and tools and stock from the UK it’s a no BRAINER to be VAT registered you will collect it from your customers but at what rate % because on the plus side of being VAT registered Per 100M drum roll , your making £8.00 back easy it adds up switches, sockets etc once you are VAT registered and getting trade price wherever you get your stock from you’ll be £££ in
First bits always hard with any change iPhone update Every one struggles to adjust to it for 2/3 days until 💥 it’s in your head it’s working and it’s as smooth and 10X better there’s no ifs or buts about being VAT registered there’s only one way forward if your on that type of money VAT man doesn’t care 😂 he wants his money 💰
Adam costs you £1,200 a month??? What happened to the £3odd an hour apprentices were supposed to get?
I am being a bit thick, but leaving aside the added accounting costs of being VAT registered why does there need to be any differential prices to customers? Prior to VAT registration the customer would have paid VAT to you on parts and labour, after VAT registration they have to pay VAT on parts and labour, unless of course you were operating on a cash nudge nudge model
From what I understand, The customer would only have paid VAT on parts previously and not the Labour.
The VAT in parts would have already been paid to the wholesaler so wouldn't need to be paid to the tax man.
@@TomRaymondNuttall Thanks.
There doesn't need to be any difference as far as the average domestic customer is concerned - you don't tell them, it isn't relevant to the price of their job. You tell them the job is £120, simple as that. The same as for every other thing they buy, it's non-negotiable. They wouldn't go to Sofas R Us and want to pay £332.50 for a sofa priced at £399.. The sofa is £399, take it or leave it.
Getting into what is + VAT and what is not when you are not VAT registered is a path to insanity and best avoided. You don't tell the customer how much the materials are plus VAT - because he then thinks that instead of paying £50 + VAT, he only needs to give you £50 cash because he's not VAT reg, obviously.
The wholesalers charged £50+ VAT (ie. £60) whether you are VAT registered or not, they don't give a toss, it doesn't matter to them whether you can claim the VAT portion back. Whether you are VAT reg or not, in both cases you still have to get £60 out of your pocket to get the goods.
The only people who need to know a job if a job is + VAT or not are people/businesses who are VAT registered themselves and can claim back the VAT from your bill.
The benefit of registration is, of course, that you get to claim that £10 back from the £60 you shelled out for materials. Yes, you are an unpaid tax collector, but hey, you only pay the VAT when you are making money - sometimes he will send you a cheque if you've shelled out more on VAT on expenses than you have taken in from invoices.
Trust yourself mate and the decisions you make as everything nearly always works out in the end and if not you'll make the right decision to rectify it. Also, the future didn't exist, it's only a thought in your head.
Trooper?
Sat on his back making videos,
Get our nurses paid
I guess it depends how most of your work comes in, ie are you out quoting against other sparks, or do you have a list of contacts like builders, landlords etc that just call you in to do the work? I think if you're out quoting for private homeowners, against othersparks then you'll be coming in 20% higher, and id say majority of homeowners tend to go for the cheaper quotes
Don’t do it Nick....people don’t like paying vat on top of an invoice and you will loose customers , plus it’s a nightmare to keep on top of the paperwork ( IMO )
cheers...👍
Go big or go home.
From a current perspective of being a business owner myself, if a self employed electrician has staff, premises, materials, van on the road, insurances, fuel, tools, enrolment fees, income tax- they can’t be making much money if they turnover less than £85,000 aka less than threshold of VAT.
Not stating my own earnings but some guys wouldn’t get up out of bed for less than £600 per day with an apprentice and business premises.
do yourself a big favour Nick stop over thinking everything, you made a video once talking about your mental state of mind after the lost of your friend, but despite that you have managed to move forward an start building a successful business which you should be proud of Achieving that, but watching a lot of your videos i have noticed that you really do tend to overthink everything an therefore start repeating everything ( i have that habit to an i think a lot of people do ) but what i think you should do is maybe see a financial service an work with them to figure out whats the best course of action for you to take to continue to build an grow your business, as your workload expands so will your need to hire someone else , you an Adam make an amazing team but soon you,ll need to have Adam go for his licence / certificate an start taking on more work an responsibility which in term with make you more money which will also open up your need to hire someone else, it can be a scary world out there specially going into business for yourself but i believe that you will be able to do it IF you believe in yourself, cheers for Aus
I don’t know if you’re going to see this mate, I’m probably about to get a little ahead of myself but I feel it’s worth saying and you deserve to hear it. I’ve known you from afar for a good while (you were good mates with my big bro at school) and we got talking about you one evening and ever since I’ve been subscribed and keeping up with your videos. As a person, as a young business man, as a role model to a younger man or indeed person, it has to be said Nick - you’re an absolute trooper. To see your work ethic, your achievements both big and small, your transparency & honesty - it’s impossible to wish you anything but the best. You’ve carved a path and made it your own, as a small business owner full of the same fears and doubts, it’s somewhat comforting and reassuring to hear it from someone else, a little further along the line than I, that it’s not just me with those fears & doubts. And to realise in hind sight, 9 times out of 10, the fears and worries weren’t worth the energy and the success always followed the hard work. I just want it to be said, you really are inspiring my man, you’re a pleasure to watch & follow along with and like I said, I wish you all the best with everything because you are a complete and utter trooper! Happy & proud to see you succeeding big bro 🙏 TG