Affiliate marketing & VAT in the UK

Is anyone who makes most of their money on affiliate programs and who lives in the UK registered for VAT?

What are the points for and against being VAT registered? I don't reach the £60k compulsory threshold yet but am considering the voluntary registration.

 

im sure that you can write off alot more if you are VAT registered in the UK, but don't quote me on that, will be interesting to see what others have to say

 

I just emailed an accountant who is apparently an expert on this sort of thing. My problem at the moment is that I have very few expenses to reduce my tax bills. 90% of my online income is pure profit and with a day job as well I end up paying 40% tax on all of my affiliate earnings. Any help on this is much appreciated!

 

Am interested in this too - am in the same boat with the tax thing!

 

To quote my new accountant (an expert on UK affiliate marketing):

 

I would NEVER register for VAT if you are below the threshold. A tiny percentage may benefit from this (certainly not affiliates) and if you are part of that group, you would already know it.

 

Thanks yfs1, that seems to be the best advice.

Making money online seems to be much easier than figuring out how to run a business.

 

How are you set up at the moment then?

(If you dont mind me asking....)

 

You can still register your business and not register for VAT. They are two seperate steps and aren't dependant on each other (Well you have to be registered in order to then register for VAT)..Since this is a UK thread, Weirfire wrote me a great guide to starting a business

It just so happens VAT works the same way in the Republic as it does in the UK and I had to face the same issues when I started. My accountant strongly advised against registering for VAT and I had a lot of physical stock (which is one criteria)

 

At present I am a sole trader.

 

Hmm interesting.

Any more links I should be aware of? It is better to be a limited company?

 

And it just so happens my Dad is a VAT man and has given me a few lectures on the subject.

My advice to you is keep all your records of purchases made!! Keep receipts, invoices, anything you paid VAT on. You can claim VAT for up to 3 years prior to becoming VAT registered. So when you register you can claim back all those products you purchased from years ago and this should make the first year easy enough.

If you are business to business it won't matter either because you just charge your normal prices + VAT and the business purchasing the products from you just claims it back (if they are registered).

If you need more advice about things like exporting business when you're VAT registered I'll pass you my Dads email address and you can bug him with all sorts of questions lol.