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Should I register for VAT?
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Sales
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Costs on which you pay
VAT (include the VAT)
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Costs on which there is
no VAT or zero rated
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Your Profit
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41000
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What percentage of your
customers are businesses?
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Business
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Public
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Total
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Sales
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50,000
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0
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50,000
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Costs after reclaiming VAT
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6,809
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0
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6,809
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Costs on which there is no VAT or zero
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1,000
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0
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1,000
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Your Profit
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42,191
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0
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42,191
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Effect of going VAT
registered
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Beneficial
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1,191
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The
calculations assume that you absorb all the extra cost to the public
which
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arises when you become
VAT registered ie no price increase.
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If it makes sense to
increase prices, why not raise them anyway?
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Every small business
(turnover below £150,000) should also analyse the
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impact of going onto the
flat rate VAT scheme.
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At the extreme, this
could boost profits by £8,000.
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