Best Accountants in Bradford

Hitting the VAT threshold where you must charge VAT on sales and reclaim VAT on purchases is a point in time that strikes fear and dread into a lot of business owners (particularly those serving the public).... But, it should be something to celebrate (at least momentarily). First let me give you a bit of background. Businesses in the UK are required to register for VAT purposes once they reach a TURNOVER of £85,000. Some industries can hit the threshold quickly i.e. Sam is a builder based in Keighley. He started up mid 2020 and has completed about 30 projects in that time. Some tiny and some as big as lifting the roof off 😅. Material prices are sky rocketing, and as an industry, they charge materials and labour to the customer. But that means his turnover has now reached threshold. There are ways of delaying the enviable but its quite a lot of faff and ultimately not really worth the hassle if it is inevitable. However in the instance of Keith, a self employed delivery driver based in Bradford who deals mostly with domestic customers (i.e. people, not businesses), he will need to add VAT onto his costs from the date of VAT registration. If he takes the 20% increase and hands it straight onto his customer, it instantly makes him 20% more expensive than his non VAT registered competitors. So why in the heck should I celebrate?! I hear you asking…..