Register for VAT - Yes or No

**scifind** · 15-09-04

Hi
I am a small sole trader.
I dont have the turnover to be required to register for VAT (yet)
Would I be better off registering?
Do I get to claim the VAT of affiliate payments from the merchants - networks?
If so - and I can recoup VAT from purchases I think I would be a little better off.
Is this the way it works?

**DaveR** · 15-09-04

The netwroks will add 17.5% to your payments. You will be able to claim back the VAT on your purchases. You will pass the difference on to HMC&E.

The down sides form my perspective is that
1. More time and hasstle (particularly if you've got a lot of independents)
2. Some of the bookies with independent progs will not pay VAT. So I'm 17.5% out of pocket.
3. There is also a risk with CJ that HMC&E will demand the vat payment. Though from what I understand CJ are intending to pay VAT sometime.

Dave

**ianm** · 15-09-04

It really comes down to how much you think you are going to gain from being able to claim VAT on purchases and whether that is going to off-set the amount of time you spend doing VAT returns each quarter.

Another thing to bear in mind is that as you are now a Merchant as well, you would have to charge VAT on sales so either your prices go up by 17.5% or your profit margin goes down by 17.5%.

**999gi** · 15-09-04

Not sure I understand your circumstances exactly but if you have a shop then unless its for a zero rated supply (books say) you'll have to charge your customers VAT so while you'll be able to claim back VAT on suppliers bills, your shop prices will go up by 17.5% for your customers without you making any more money.

**trafficbroker** · 15-09-04

If you do any volume of PPC work I'd say it's pretty essential to become VAT registered. You save on the 21% Irish rate - 21% off your spend makes a massive difference to your profit margins.

**harris1** · 15-09-04

I agree if you spend quite a bit its essential. But dont under estimate the extra paper work and expense if you use an accountant.

Its also some thing else to worry about if you get audited.

**Gray** · 15-09-04

Get back all the VAT you pay, sounds great.

Harsh reality - lots of extra paperwork, visits from VAT office to check everything, most people end up paying more to VAT office than they reclaim (after all it is a tax).

**trafficbroker** · 16-09-04

True, it's a hassle. I guess it depends on your volume, if you spend more than £2K or so a month on Google I'd say get VAT registered.

**harris1** · 16-09-04

Personally its increased my admin around 4 fold. That might seem like alot but doing quarterly returns if you have alot to account for is a load of extra work, each one is like a mini year end return.

There is always the fear you are not doing something right, I dread the day I get a visit, I am sure they will find something wrong even with our best efforts.

Without my wife keeping the vat records and the accoutant I dont think I would be able to do it to be honest.

**ianm** · 16-09-04

Originally posted by Gray
most people end up paying more to VAT office than they reclaim (after all it is a tax).

I think the C&E would be very interested in any one who was always reclaiming more than they paid.

Also, it isn't actually you who's paying the tax (unless you're dealing with one of the independent bookies) - it's your customers.

**harris1** · 16-09-04

I think the C&E would be very interested in any one who was always reclaiming more than they paid.

True they are likely to take a close look at what you are doing, but this is perfectly normal particularly for businesses that do alot of business in the EU and further a field.