Products > Test Equipment
A broken 34470A and Keysight's terrible customer service
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Cerebus:

--- Quote from: mikeselectricstuff on August 26, 2021, 08:33:37 pm ---
--- Quote from: nctnico on August 26, 2021, 07:49:04 pm ---I see that it is possible to apply for a company VAT ID without much hassle in the UK; that could be a good starting point.

--- End quote ---
The problem with that is that once you are registered, you must charge VAT on all sales & services, and submit returns accounting for it. If you mostly supply to business then registering is a no-brainer as you can reclaim VAT on all purchases, but if a significant market is individuals or non-VAT registered businesses then it basically means your prices go up 20%

--- End quote ---

And you can get fined for making a late VAT return or failing to make a return (even if that return would be "0"), and if you fail to make a return the VATman may make up a number and then chase you through the courts for that tax or assign it to a collections agency.
Saskia:

--- Quote from: nctnico on August 26, 2021, 06:24:35 pm ---
--- Quote from: 6thimage on August 26, 2021, 05:46:50 pm ---
--- Quote from: Keysight DanielBogdanoff on August 26, 2021, 05:03:36 pm ---Regarding the Europe/VAT ID/non-business concerns, that's an area that I unfortunately can't help or circumvent/shortcut around the official channels/statements. If I could I would 100% have done it already.

--- End quote ---

Is there any chance you can explain the reasoning behind the change? Keysight's position isn't great, but it would be more palatable if we at least had a reason why. It would be fantastic if you could provide a list of the required criteria for classing a business, but I know this will probably be a bit of a stretch.

--- End quote ---
What do you think about simply registering a business? I get the feeling that this thread is more about a unique situation in the UK where people running a business don't register their businesses formally and now are suddenly confronted by a different culture where having a company formally registered is the norm.

--- End quote ---

This is absolute bullshit and you know it. Preparing and filing these VAT thingies without a tax lawyer is risky at best, suicidal if you don't know what you are doing.
Monthly filings plus a summary filing for the entire year easily amounts to at least a week's worth plus the tax lawyer charges. It also invites tax audits if your revenue is not according to the IRS expectations.

How much is your work worth to you ? Do you value your work at less than 300 quid per week (to just name a number)?
Do you have time for a tax audit (which will set you back at least 2 weeks ?)

If so, just check the field about the VAT deduction eligibility.

There is a reason that our authorities allow you to not check this if you are below 25000 € annually. They don't want to be arsed with the overhead. Neither does the small business owner.

Why I can tell ?
Because I just had this mishap and have to prepare all those documents. Furthermore you automatically have to pay accident insurance (at least over here), trade association memberships, etc.

Result: it is such a nightmare that I will in fact close my side business (which is all set up legally, even got my employer's permission ...)

Sure, I could just go ahead and file those, it's not a lot of work ...

Are we living on the same planet ?


Cerebus:

--- Quote from: Saskia on August 26, 2021, 08:51:15 pm ---Why I can tell ?
Because I just had this mishap and have to prepare all those documents. Furthermore you automatically have to pay accident insurance (at least over here), trade association memberships, etc.

--- End quote ---

Good point, I'd forgotten about mandatory insurance. In the UK there's mandatory Employer's Liability Insurance - in practice it's pretty cheap for a small business but it's another thing you can get into trouble for not having:

--- Quote from: HSE guidance ---You can be fined up to £2500 for any day which you are without suitable insurance. If you do not display the certificate of insurance or refuse to make it available to HSE inspectors when they ask, you can be fined up to £1000.
--- End quote ---


I forgot about it because, ironically, the only reason I do business via a registered company rather than as a sole trader is that I needed Professional Liability Insurance and having a limited liability company makes this easier to get (for no apparent good reason) and my insurer bundles Employers Liability, and Public Liability Insurance with that policy.
bd139:
Also worth throwing IR35 in here as well. “Disguised employment”.

I folded my company recently if I’m honest as I have gone permanent. Someone else can deal with all that crap.
nctnico:

--- Quote from: mikeselectricstuff on August 26, 2021, 08:33:37 pm ---
--- Quote from: nctnico on August 26, 2021, 07:49:04 pm ---I see that it is possible to apply for a company VAT ID without much hassle in the UK; that could be a good starting point.

--- End quote ---
The problem with that is that once you are registered, you must charge VAT on all sales & services, and submit returns accounting for it. If you mostly supply to business then registering is a no-brainer as you can reclaim VAT on all purchases, but if a significant market is individuals or non-VAT registered businesses then it basically means your prices go up 20%

--- End quote ---
Well, you can also ask whether you want to run a business that stays well under the 85000 pound turnover limit forever? Maybe you can do this for a company that only provides services and still make a decent living but as soon as you need to buy goods then it is easy to hit that limit. In reality I doubt it is worthwhile to run a company fulltime that doesn't reach the annual 85000 pound turnover limit.


--- Quote from: Saskia on August 26, 2021, 08:51:15 pm ---Sure, I could just go ahead and file those, it's not a lot of work ...

Are we living on the same planet ?

--- End quote ---
Yes because all the paperwork you listed exists on this side of the pond as well. It is exactly what I have been doing for over 25 years!
And you don't have to report VAT every month but every 3 months and in some occasions once per year: https://www.gov.uk/vat-annual-accounting-scheme. In Germany as well: https://www.steuertipps.de/lexikon/u/umsatzsteuer-abgabefrist Over here it is pretty much the same: In the beginning I reported VAT annually and when business grew it went to quarterly.

Filling in my VAT return & making the payment takes me less than an hour every 3 months. 15 minutes is more like it. The numbers come straight from my Excel sheet. Copy & paste into the website. Actually, my Excel sheet automatically calculates the VAT deduction as well (that also exists here but uses a complicated formula) but since working full time the number never got positive again. The same with the income tax, export amounts, import amounts, deductables, investments, etc. It is all nicely summarised using Excel.

The tax audits I was subjected to so far took about 2 hours. Just printed the Excel sheets and got the binders with incoming and outgoing invoices handy for inspection. Passed with flying colors each time. As I wrote before: accountants and tax lawyers like to make them look invaluable for your business. That is 100% true if you have a multi-million dollar/pound/euro company but for a one-man-band doing the administration part yourself is doable. You can find everything on your government's website nowadays. Unless ofcourse you think your time is worth more than you pay to an accountant to take care of it. The caveat there is that you'll still be responsible for whatever your accountant reports so you need to know about it anyway and be able to spot errors. The key is to keep a tidy administration which in the end is also benificial for yourself. I can see exactly how much money I made (hopefully), how much I still need to receive and how much VAT I have to pay.

Trade associations have ceased to exist for a while now over here (maybe a decade or so). Not all companies where required to be a member anyway (I never had to deal with trade associations for my computer & electronics related business).

Accident insurance is good to have. The first thing I took care of when I started working full time to make sure I have an income when I'm not able to work. Currently it is not mandatory over here but that is about to change which is a good thing IMO.

According to this page: https://www.simplybusiness.co.uk/insurance/faq/is-professional-indemnity-insurance-compulsory-by-law/ Professional Liability Insurance is not mandatory by law in the UK with a few exceptions. The NL isn't much different in that respect and from what I've found it is the same in Germany.  Public liability insurance is handy for when you knock over a Ming vase while having a cup of coffee. In reality engineering work is almost impossible to insure where it comes to professional liability. Forget about that. You have to take care of that in your terms & conditions (and make sure a project's paperwork is in order including highlighting areas which concern safety issues; the customer has to sign off on those).

You have to be very careful to read the insurance policies offered because a lot of insurance companies like you to pay a lot for a professional liability insurance policy which covers absolutely nothing. For me the hardest part of getting the insurances in order was a plain & simple public liability insurance. The insurance I got in the end costs me around 125 euro per year or so for a coverage up to several million euro.

I realise that if you just start out it is a huge wall of paperwork but if you take it one step at a time and at least use a spreadsheet it is manageable. My administration spreadsheet is really simple: 12 sheets with money coming in (columns with total received, total to be paid and VAT), 12 sheets with money going out (amount and VAT),  1 sheet with quarterly summaries and a total, one sheet with an annual summary, one sheet with the exports, sheet with imports and finally one sheet with VAT numbers of clients and HS codes for products.
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