One of the biggest challenges I had when I first started Home Jane was having to become VAT-registered sooner then I had anticipated. The aim was to become VAT-registered in year three, which would have given me plenty of time to get my head around running a business and all the other daunting areas that were involved in that before diving into the complex world of VAT returns.
In the first six months of year one it was fast becoming
apparent that the company was growing more rapidly then I had
originally anticipated. I decided to move out of my home office and
into a real office as I had to recruit a member of staff to help
with the admin. As I was just starting to get my head around the
complex world of PAYE & NI, I realised we would soon have to
register for VAT. It made me realise how low the VAT threshold is
and how difficult it must be for most business to stay beneath the
Registering for VAT was fairly easy, but what I found most challenging was trying to understand which VAT scheme we should be on, what we would be able to claim VAT on and how the disbursements worked.
The HMRC's website had a wealth of information but none of it was written in understandable English and the information was often very overwhelming. I phoned the VAT helpline quite regularly but was constantly referred to article X on the website. It was then either very difficult to read and understand this article or very difficult to find it. Most of the information seemed to be directed at tax professionals not to the business layman.
I found it very frustrating to get to grips with what I should be doing and how I should be recording data. I also felt at times that the information was so complex in order to trip you up. The HMRC's new employer information had been relatively simple to understand and it seemed non-sensical to me that the VAT people didn't have the same approach.
Unfortunately I hadn't been in business long enough to have a trusted accountant to had to help me through my VAT dilemma, so I ended up visiting one of the HMRC's open day style events. I went to a VAT workshop and spoke to a VAT advisor directly. They actually spent a lot of time explaining things in simple language and they were very accommodating of my 'stupid' questions.
Don't waste excessive time trying to read through the same confusing documentation over and over again. Your time as a business owner is precious so if you can speak to someone directly. They will be able to answer your questions directly and you can ask specific questions related to your business.
The HMRC see you as a tax collector when you are running a business so they are there to help you not trip you up. Go to their events, get help direct from their people and don't run scared from them - that only leads to trouble!
Find out more about Home Jane
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