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I have started a small business supplying timber flooring and I am not registered for VAT – what are the implications of being VAT registered? Would my products be dearer to the customer if I was registered? Is it better for me to be VAT registered?

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I have started a small business supplying timber flooring and I am not registered for VAT – what are the implications of being VAT registered? Would my products be dearer to the customer if I was registered? Is it better for me to be VAT registered?

A trader is generally required to register for VAT for making supplies of goods and/or services, subject to his or her turnover exceeding certain thresholds. The current thresholds are €37,500 for the supply of services, and €75,000 for the supply of goods. Traders whose turnover does not exceed the thresholds can choose to register for VAT.

Timber flooring would generally be liable to VAT at the standard rate which is currently 21pc (assuming it is supply only and does not include installation of the product). This would mean that if you register for VAT you would have to charge your customers VAT on your sales and pay it over to the Revenue. If your customer was also VAT registered they could reclaim the amount of VAT paid and it would not be a cost to them. It would be an extra cost to any non-VAT-registered customers as they are not entitled to reclaim VAT on purchases.

By registering for VAT you should be entitled to reclaim any VAT you incur on purchases in the course of your business.

The decision to register should depend largely on whether the majority of your customers are VAT registered or not.

Answered by

Mark Barrett

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8. Social Entrepreneurs Ireland
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I have started a small business supplying timber flooring and I am not registered for VAT – what are the implications of being VAT registered? Would my products be dearer to the customer if I was registered? Is it better for me to be VAT registered?

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