VAT & Self Employed Question

PurpleMunchkin

Hi There,

Im hoping someone will be able to answer a quick question question regading VAT.

I am registered self employed and currently submit my tax return each year and only earn somewhere in the region of £2000 per year.

I have just been offered a part time job :j but it is for a european company, based in Holland and i am being asked for a VAT number.

I have checked out the HMRC website and see that earnings have to be about £60,000 before you start having to deal with VAT. However it also says this varies for other countries.

So my question is do i need to regsiter for VAT ? do i need to obtain a VAT number ? or can i simply say my earnings are no where near the threshold and therefore i dont have/need a VAT number.

Sorry editing to add - im based in england, will be doing the work in england and then sending completed work via email to holland (not sure if this makes any difference to anything)
:beer: in advance

agrinnall

If your turnover is over £73,000 you are required to be VAT registered, however, if it's less than that you can register voluntarily. You would then have to charge all of your customers VAT, making your prices 20% higher than they are now. I would suggest you ask your prospective customer if they will do business with you without the need for a VAT number.

http://www.hmrc.gov.uk/vat/start/register/index.htm

le_loup

Do you understand the difference between "earnings" and "turnover"?
The VAT registration turnover is as agrinnall says but you can chose to opt in if your turnover is less. Are your clients VAT registered? If so, you charge them VAT and the reclaim it, just as you would on you purchases.

John_Pierpoint

Could this also be a possibility:

http://www.hmrc.gov.uk/vat/start/schemes/flat-rate.htm

PurpleMunchkin

Thanks for the replies, they were really helpful.

I think maybe the flat rate option would work out the best. However having just checked i may not need the VAT number afterall.

:beer:

agrinnall

There are two other benefits of being VAT registered: if you buy goods or services for your business then you can reclaim the VAT that you've paid (as le loup mentioned, but in passing so you might have missed it); and providing a VAT number can make your business look more professional to your customers. However, if you do decide to go for it it is imperative that you keep on top of the paperwork and ensure you submit returns and make any payments on time, you definitely do not want HMRC doing a VAT inspection if you can avoid it.