Kate
CDC/PT/PITA
Yup, you can voluntarily register for VAT even if you are below the threshold. I have three VAT registered businesses. However, though it sounds like you would save money, unless you sell a lot to businesses or have a lot of outgoings it is likely to be more hassle than it is worth. For a start, you have to submit a quarterly VAT return, and you also have to pay HMRC the VAT on your sales. You can offset any outgoing VAT against that, but only on eligible VATable purchases e.g. not your wages etc.
Two of my three businesses are above the threshold and would have to be registered anyway, and the other one has high outgoings so it's worth being registered. I wouldn't dream of registering myself for VAT as a CDC because I would end up paying out every quarter and because I already have accounts coming out of my ears
As for putting down utility bills, room etc. on your accounts - you should work out what % of your house is dedicated to your business, and what % of your bills are directly due to the business, and as long as it's less than a third (IIRC) you can put it in your accounts as such. If in doubt, ask your accountant. Keep all receipts and a mileage log (so that you can differentiate business miles from personal miles). Make sure your car is insured for business use, and of course you can claim the difference back as a business expense too.
Two of my three businesses are above the threshold and would have to be registered anyway, and the other one has high outgoings so it's worth being registered. I wouldn't dream of registering myself for VAT as a CDC because I would end up paying out every quarter and because I already have accounts coming out of my ears
As for putting down utility bills, room etc. on your accounts - you should work out what % of your house is dedicated to your business, and what % of your bills are directly due to the business, and as long as it's less than a third (IIRC) you can put it in your accounts as such. If in doubt, ask your accountant. Keep all receipts and a mileage log (so that you can differentiate business miles from personal miles). Make sure your car is insured for business use, and of course you can claim the difference back as a business expense too.
