Poor honey crop on the BBC News

[dpearce4]

so icanhopit, if i sell a full collony of bees its vatable but if i were to sell a nuc it wouldnt be?

what if i were to sell only bees in commercial hives lol could i get away with that.

dont forget that if your vat registered you can also claim back a proportion of your car expenses against vat, same with phone bill and im sure other things to.

 

[Into the lions den]

Honey is zero rated.
Bees are zero rated.
Hives etc are standard rated.

Zero rated and exempt are different things, you VAT records must include all zero rated transactions in your ingoings and outgoings, but not exempt things.

My sales are almost all zero rated as its 95% honey (wax sales are standard rated), and most of my purchases (bar zero rated syrup) are standard rated, so I always get money back. Most beekeepers would be the same, they would get the vast majority of their VAT expenditure back. Even the VAT on *normal*jars caps and labels is 100% recoverable, as, upon sale, its just food in a standard container as an integral part of the food purchase.(the reason for the stars round normal are that if the packaging is of a premium nature , such as pottery, then the product carries VAT as it has gone from the food market to the gift market.)

Unless your turnover is minute and the paperwork is not worthwhile, OR you are cash trading and do not want to be taxed on your income from the bees, if any, then I cannot see any good reason NOT to VAT register. All your fuel etc that has 20% VAT on it is reclaimable. Syrup/sugar/fondant apart its almost 20% of your inputs you could get back.

 

[alldigging]

like, keep proper records, and you can claim 100% of your VAT back.

And don't forget to do the VAT paperwork and the new EU vat paperwork too.

 

[dickndoris]

Honey is zero rated.
Bees are zero rated.
Hives etc are standard rated.

Zero rated and exempt are different things, you VAT records must include all zero rated transactions in your ingoings and outgoings, but not exempt things.

My sales are almost all zero rated as its 95% honey (wax sales are standard rated), and most of my purchases (bar zero rated syrup) are standard rated, so I always get money back. Most beekeepers would be the same, they would get the vast majority of their VAT expenditure back. Even the VAT on *normal*jars caps and labels is 100% recoverable, as, upon sale, its just food in a standard container as an integral part of the food purchase.(the reason for the stars round normal are that if the packaging is of a premium nature , such as pottery, then the product carries VAT as it has gone from the food market to the gift market.)

Unless your turnover is minute and the paperwork is not worthwhile, OR you are cash trading and do not want to be taxed on your income from the bees, if any, then I cannot see any good reason NOT to VAT register. All your fuel etc that has 20% VAT on it is reclaimable. Syrup/sugar/fondant apart its almost 20% of your inputs you could get back.

I was looking today (google) on how to register a business but it seemed a nightmare as there are so many sites all seemingly filled with adverts and rubbish to a degree. Would anyone know on how to register (or maybe only with the vat man) and how it might effect another job I have that is full time?

Thanks in advance?????/

 

[Sir Quej]

Whats wrong with a £200 clapped out heap of ****, I brought a heap of **** rattled like a tank looked like it would fall apart if you tapped to hard to get me to work while I decided what to waste me money on. That that heap of **** passed every MOT and never let me down, I never serviced it just put petrol in it that car lasted 3 years best £200 I have ever spent.

Didnt say there was anything wrong with it.... Just that the ones buying cars like that (i've done it) arent looking for quality.

 

[alldigging]

I was looking today (google) on how to register a business but it seemed a nightmare as there are so many sites all seemingly filled with adverts and rubbish to a degree. Would anyone know on how to register (or maybe only with the vat man) and how it might effect another job I have that is full time?

Thanks in advance?????/

I would say speak to an accountant.

Mine has some very helpful info on his site where it explains whether it's worth while you being a ltd company or not.

The company would pay tax on the limited companys income - and you can take dividends out - and if you earn and took less than 35k you might not pay any additional tax. I think. But accountant will have answers to the questions and point out the pitfalls and issues you'd have to deal with.

VAT isn't difficult. Some of my friends do their own - I don't though!

 

[madasafish]

I speak as an ex accountant (I saw the light and took up bees).

Forming a Limited Company involves some requirements : filing Annual Accounts, paperwork, separate bank accounts (practically essential) , paying an auditor so is not a step to take without professional advice - which should cost you (unless very lucky) or it's not worth the paper etc.

 

[Into the lions den]

I speak as an ex accountant (I saw the light and took up bees).

Forming a Limited Company involves some requirements : filing Annual Accounts, paperwork, separate bank accounts (practically essential) , paying an auditor so is not a step to take without professional advice - which should cost you (unless very lucky) or it's not worth the paper etc.

But you do not need to be a limited company to register for VAT, sole traders are fine. You can register online by yourself.

Then just keep the cheapest format of Sage or Quickbooks (or whatever....ask what your proposed auditor would prefer) and at the end of each VAT period the computer calculates it all for you. It is extremely simple, and from the day you submit your VAT return (online too) to the money ending up back in your nominated bank account runs at 3 to 4 days, unless they question something, which is not often.

 

[beehive1234]

I might be way off base here........ but 20% back on expenditure, 33% to pay in tax/NI on income...............probably isn't a winner for the small busnessman?

 

[Into the lions den]

I might be way off base here........ but 20% back on expenditure, 33% to pay in tax/NI on income...............probably isn't a winner for the small busnessman?

??????
20% back on expenditure
The tax/NI is only on PROFIT...........not on all income from the bees.

Your VAT back will be a lot more than the tax and NI that getting it back will land you with. Of course your VAT back will either add to your profit or reduce losses, or even convert a small loss to a smal profit, but your tax on it will only be at the appropriate rate, so you will be keeping at least two thirds of it.

 

[beehive1234]

Does that apply to egg selling as well?

 

[Into the lions den]

Does that apply to egg selling as well?

The tax on profit only will indeed apply...............but in keeping chooks for eggs quite a lot of your inputs will be zero rated..........so the amount you get back in VAT refund may be limited as the refund is the difference between the amount of VAT you pay out against the amount of VAT you charge. It will still be a profitable maove as eggs are zero rated, so you will inevitably be paying out more than you take in VAT wise, and getting it back might help you.

 

[For want of a better word]

Limiting you liability may be a good idea if you have a partnership or other investors and or shareholders.
If you business failed you would then have limited liabilities,,.... say £1.00 as opposed to £KKK !
VAT is a separate topic, anyone can register, you are required by law to do so if your turnover exceeds certain limits

Also if you decide to register you can claim back the past 3 years of expenditure,, but that may be restricted to capital outlay... I believe.

If the nuc box was a fiver or so I believe you can supply it along with the bees zero rated. If it was a £35 polyplasticfiberglasscedarwood job then it would attract VAT along with the bees.. that is why generally a deposit is taken on a returnable container.. but VAT has to be charged on the deposit!

In a past life I sold security safes.. some were rated at 8% others 15% others zero and others exempt !
A demountable vault second hand with new locks in a grade one listed National Trust building where a new opening had to be provided for access had different rates charged for each part... then the whole lot was claimed back... nightmare!

 

[Der Alte Fritz]

A better option for small businesses

I would agree with the post that suggested limiting your liability as the next step up from sole trader. Limited Liability Partnerships (LLP) are a cheap way to run a business compared to a Ltd Company and you protect yourself.

With regard to VAT, once you reach a turnover of over £77,000 a year you are required to be VAT registered. But under £150,000 you can go for the FLAT RATE SCHEME where you do not have to do all the complex accounting required for calcualting VAT on sales and then claiming back the VAT on expenditure. Instead you simply pay a flat rate (determined by your industry) on your VATable sales which for farming is 6% and you do not claim back anything on your expenditure. At the moment you get a 1% discount for the first year. This allows you to keep simple books yourself and not have to pay an accountant or book keeper and probably saves your around 5-10k a year in their fees.

see HMRC website information

Flat Rate Scheme Rates

 

[Baggyone]

Anyone who can use a spreadsheet can do their "books" suitable for being vat registered. Its a simple business beekeeping and you certainly don't need an accountant to do it.

You would usually find that you get two quarters where you get big refunds (when the sales are on and when buying your annual jar requirements). The rest of the year is mostly sales where its all sales and not much buying.

Baggy

 

[dpearce4]

on a turnover of £150k i really hope your not paying 5-10k per year on your vat accounting, and you will still need to prepare accounts and keep books, and if you employ staff, which on that turnover you would be, do PAYE for them then you will still need to do your tax returns also on this. even with all this your acountant bill should be no more than £3000. book keeping is really easy as long as you do it at least once a week without fail, its only when you fall behind that it becomes a bind, but you can find bookkeepers quite cheaply if you dont want the hassle.

On a business such as beekeeping you would be mad to take their flat rate scheme for vat. you will get a refund each quarter from them. the flat rate scheme is great if you want pay tax when you dont need to. It would be a real bad idea.

you must also keep all paperwork for at least 7years because if you get an inspection for any of those and you dont have the paperwork your really up that creek where you dont have a paddle. The fines can be massive.

One thing im not sure about though is that if you run your beekeeping as a secondary business weather you would have to pay NI over and above your normal regular employment, on the profits you make.

 

[For want of a better word]

One thing im not sure about though is that if you run your beekeeping as a secondary business weather you would have to pay NI over and above your normal regular employment, on the profits you make.

depends upon how much you are paying on your regular business...... most of my life was spent not making a profit!

 

[Jeff Buzz]

I think also that you as a person are vat registered so any income you receive you would have to charge VAT on if its not zero rated. I do all sorts of jobs and would have to charge VAT on the all if I registered.
May still do it though as it may be worthwhile.

 

[psafloyd]

I think also that you as a person are vat registered so any income you receive you would have to charge VAT on if its not zero rated. I do all sorts of jobs and would have to charge VAT on the all if I registered.
May still do it though as it may be worthwhile.

Surely if you are selling honey as the output of a hobby (I see you have 13 hives), you will not be required to charge VAT, Jeff Buzz?

 

[ROACHMAN]

!

I am thinking of registering my beekeeping as a business, I must have getting on for £5000 worth of equipment.

Am I able to bring this equipment into the business, depreciate in over say 5-10 years which would generate a sizeable loss that I could offset againt my full time job and therefore get a tax rebate ??