Sole Trader & VAT

[srh_cronk]

Hi all,

I am new around here - seems like a great place to meet like minded business people. Hello!

I have a question and I was wondering if somebody could give some advice. I am just starting up a business as a sole trader, and wonder what to do regarding VAT.

When giving a customer an invoice (such as a limited company), as I am not VAT registered, I obviously cannot charge it. However, on a service - who is responsible for paying VAT? Am I correct in saying that it is me? Do I have to pay anything? Or can I keep the money and declare it?

I should point out that I will not be earning £60k or over, which means that I do not have to register.

Anybody with some help would be greatly appreciated!

Kind regards,
Sarah Cronk

[peterjhale]

Hi Sarah and welcome aboard

If you are not VAT registered :

- you don't charge VAT on your invoices to customers
- if you get supplied and the invoice includes VAT, you have to pay the VAT to your supplier and you can not claim it back

[srh_cronk]

Excellent, thank you very much!

[simonr]

Sarah - just a thought, but don't forget that you *can* register for VAT even if you're below the threshold. For example, if you hire a lot of equipment which you pay VAT on, you might find it worthwhile. Time to hit the spreadsheets!

S