Reducing Annual VAT Bill By 20k

I had a new client come over to us as his existing accountant didn’t know what to do with his VAT, he hadn’t done any ATT (Accounting Tax Technician) qualifications which meant he didnt know the in-depth areas surrounding VAT.

My client was an agency and provided sub-contractors to third parties, he originally charged VAT on the whole subcontractor cost and also his fee, but non of his subcontractors were vat registered, so the additional VAT that he had to charge ate into his profits.

I changed his invoicing so that we only took into account his income and not the whole invoice that was given to the third party.

By doing this, his VAT bill annually reduced by £20,000, this also increased his sales by the same value and gave him more funds to take from the company as dividends.

My client and his old accountant didn’t know you can do this.  Its always better to speak to an expert as this is what we do every day.

 

Saving £15K In Sales: You Don’t Always Need To Be VAT Registered!

I had a client come to me, she was growing her business, initially it was cost effective to be a sole trader due to income levels, but as time went by the Busines began to make more profits so we made the decision to incorporate the business to a limited company. After  nineteen more months the business was about to hit the VAT threshold so as a limited company she would have had to register for VAT, but little did she know, she supplied some exempt supplies which meant that if she reverted back to a sole trader she would not have to register for VAT.

It wasn’t in her best interests to be registered for VAT as her clients were individuals and both other businesses who could reclaim the VAT.  If she went VAT registered she would have lost a large number of clients due to the large increase in sales cost.

Reverting back to sole trader saved her around £15,000 in clients based on an activity based costing analysis done in-house.

Saving £15,000 – on sales loss.