OP
alpasty
I am VAT registered, and agree with the posts above, you would only be liable for paying backdated VAT if you go over the threshold without registering. If you register on time, you will not be liable for any VAT on income earned before registration, when you were below the threshold. I registered about a month before I predicted I would go over the threshold.
I am not sure about the current situation, but when I registered I was able reclaim the VAT on capital expenditure (tools, van, equipment) bought in the previous three years, which was helpful.
A word of warning, if you want to de register, you will be liable for VAT on all business assets for which you claimed VAT, at their current value, even if they are retained.
One other point about being registered, in general is that as previously mentioned, it only actually increases the price to your customer on the labour part of the invoice. Commercial customers often specifically choose a VAT registered business, as the it is the only way in which they can reclaim the VAT on the materials used in the job (unless they buy them themselves). I kept most of my regular customers after registering, and new customers seen to have more faith in a VAT registered company/sole trader.
I am not sure about the current situation, but when I registered I was able reclaim the VAT on capital expenditure (tools, van, equipment) bought in the previous three years, which was helpful.
A word of warning, if you want to de register, you will be liable for VAT on all business assets for which you claimed VAT, at their current value, even if they are retained.
One other point about being registered, in general is that as previously mentioned, it only actually increases the price to your customer on the labour part of the invoice. Commercial customers often specifically choose a VAT registered business, as the it is the only way in which they can reclaim the VAT on the materials used in the job (unless they buy them themselves). I kept most of my regular customers after registering, and new customers seen to have more faith in a VAT registered company/sole trader.