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Calling on the STW collective knowledge.
If i'm a full time PAYE employee for a company and also work evenings and weekends as a freelancer, do i need to be VAT registered for the Ltd company set up for freelancing if my PAYE income and freelance turnover does not exceed £70k?
If not, are there any benefits of being VAT registered or is it just a case of turnover not reaching the £70k so I can't be VAT registered?
I would obviously let my employer know about the freelance work.
Sorry if the above does not make sense. I'm not 100% sure how to explain it.
1. The Ltd company will only need to register for VAT if the Turnover exceeds 70K. Note - your PAYE income is NOT included in the Ltd company turnover calculation for VAT purposes.
2. You can register the Ltd company for VAT even if the Turnover is below 70K if you wish to claim the VAT back on the expenses the business incurs.
Depends is the answer I'm afraid.
VAT registration is often advantageous as you can gain abt 3-4% of turnover using the flat rate scheme.
Limited company status can be preferrable in most circumstances but it depends on the level of income whether its worthwhile doing it. If your freelance work is through an agency you probably would need a ltd company.
If you want to post up your current earning and your projected freelance earnings I'll try and give you a better steer. Or PM them if you'd rather.
Thanks for the replies. It's cleared up a lot.
I would expect PAYE to be circa 35k and freelance to be circa 10k.
You wouldn't need to a setup a limited company or become vat registered with 10k turnover. I wouldn't imagine your freelance work would benefit from voluntary registration either as you would be invoice/charging your clients for your time/services with little in the way of consumables or resale items.