V.A.T/ TAX help

richyd1

Hiya Everybody

I wonder if someone could help me with the following questions as I am unable to determine what to do next!!

I have been running a small business for the last 6 months after being made redundant. I cannot obtain any loans or finance and I am not V.A.T registered. I am thinking of Leasing a car for 12,24 or 36 months as I cannot afford to pay for a car outright. But I do would like to know if it is worth me becoming VAT registered to claim back mielage, the lease cost per month and anything else agains buying a car?

Apart from this is it worth becoming VAT registered anyway? And how does it work? What are the figures? I earn roughly £1200 per month. A lease car I am looking at would be £170 per month before fuel, it would be brand new.

Any advice much appreciated

Rich

pelirocco

What business are you running ? not sure you can claim back on cars ,

richyd1

Hi

Would the nature of my business have an effect on claiming?

Rich

mysmeg

For leasing you can only claim back 50% of the vat paidYou can only claim back 100 Percent VAT on petrol when your car is used 100 percent for business use - example would be a taxi driver, or delivery van. When you use the vehicle for your every day use including driving to and from your place of work etc and the vehicle has more than one use, then a scale charge would be applied. From your income, I wouldn't advise you to register for Vat, but here is a link that might help you decide
See this link:rolleyes:





http://www.mmgca.co.uk/helpsheets/vat/vat_motor_expenses.htm


www.mmgca.co.uk/helpsheets/vat/vat_motor_expenses.htm

chalkie99

What you earn is irrelevant as far as VAT is concerned - what matters is your turnover.

You do not say what your business is but it might be worth you registering if you supply goods or services mainly to other VAT registered businesses as they will be able to claim back the VAT you charge them and you can, in turn, reclaim the VAT you pay out on your purchases.

Cannot really advise on leasing but if you are unable to get credit elsewhere it may be a problem and your wages are low to be considering a big outlay.

JasonLVC

The lease car company will do credit checks and may not provide you a car if you are considerd a high risk.....as a money saving site, you should first consider whether you NEED a brand new car or whether you can get by on a run-about - bearing in mind if you are struggling for cash already, why load yourself with more debt?.

A lease car is a contract and so if you cannot afford to pay, they'll still want a large chunk of cash from you to terminate early and you'll have nothing to show for it, whereas if you buy a car (new or old), you can aslways sell it to free up some cash.

As for VAT, as the previous poster has noted - if you sell mainly B2B then VAT registration makes sense, if you sell mainly B2C (ie, man on the street) then adding 15% to your prices may make you more expesnive then your competitot, unless you offer a very unique service no-one else does.

If you need to reclaim VAT in order to sruvive then you need to really consider your financial future - don't mean to be preachy, but registering for VAT is a BUSINESS decision, not a means to get a cheap car loan.