: "Steve Rose" .  If you elect to claim back VAT retrospectively you also
> have to pay retrospective tax for the same period on any VAT type
> sales you may have made.  This, I believe, would include such things
> as the sale of used equipment, wax, perhaps even colonies.


 I am also no  expert on UK tax - but....
If u claim back VAT on your outgoings, u reduce the amount of expences u can
then put against income on your tax return.  So u pay more income tax. If u
claim back 3 years, you have to adjust your last three years income tax
returns -
more than an hour or so I would think.
Also, honey is not subject to VAT but any services u provide are. So you
have to pay over VAT charged for collecting swarms from commercial property,
lecturing, selling bees.  So if u charge a £30 fee, u have to pay over £5.25
as VAT, leaving £24.75.
All this means that whether to register depends on what proportion of your
income will be subject to VAT, how much VAT u pay on  expences - and also on
your highest rate of tax.

This tends to lessen the benefit.  Take a part-time beekeeper earning £2000
pa from honey, £300  pa from fees and nucs, and paying out £500 pa on
VATable expences.   The £2000 is unaffected.  The £300 reduces the VAT
recovered on the £500 to £200 x 17.5%= £35.    The increase in income tax is
£7.70 at 22%, leaving a net benefit from VAT registration of £27.30 pa.  The
benefit reduces to £21 pa if your highest tax rate is 40% (due to the day
job).

Filling in the form may be simple but u have to learn another set of rules
to calculate input and output VAT. For example, car expences for income tax
can be calculated simply at 45p per
mile whatever u actually spend on fuel, servicing, insurance, depreciation.
VAT is about the VAT u actually pay or charge as shown on receipts /
invoices.  I do not know exactly how VAT on shared car use is worked out
today, or for shared use of your home for buisness purposes  - but I do know
I was very glad when I was allowed to de-register on retirement from
full-time buisness.
Of course the larger sums involved for a full-time UK beekeeper may make it
much more worthwhile.

Robin Dartington

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