I was wondering if anyone is doing anything to stay within there original rate on the FRS?
Background: My turnover (VAT inclusive) is £150,000 and my original rate was 12%, running a labour only company means that I made nearly £7K on VAT per annum.
So My question is, is anyone is in a similar situation and what are the best ways around this? By trying to qualify for the 2% spend on applicable purchases I could keep my original rate.
I could just spend £3K on office materials (cartidges, paper which is way more than I need obviously) but even spebding £3K on “supplies” I will still be almost £4K better off even if I don’t use the supplies.
I also have read a few articles on “expanding my business” and its definatley worth it. IE Trying my hand at dealing in ART or watches and trying to make a profit that way. Even if you lose the money you invested and had to sell the items at a lose, I believe you would be within the new regulations.
The limited cost trader is an anti avoidance legislation hence its difficult to get around it. I would recommend closely looking through notice 733 so you understand all the finer points esp section 4.6 which confirms that goods should be relevant and used exclusively for the purposes of the business and do not include capital items.