Using Contractors for General Cleaning - UK Specific
Hey all. First post here. This is UK specific so I hope someone can help. After COVID dies down I'm going to be starting up a house cleaning service in the UK.
I've been running the numbers and VAT kills you doesn't it. 20% is brutal. Then if we look at the threshold of £85K it makes me think a lot of the contractors I'll be sending work to wont be VAT registered.
That means I'm sending 20% VAT to HMRC with minimal balancing as I'll be a contractor only service working from home. So I might have less than £5K a year I'll pay in VAT to deduct.
This is simply my observation right now with the VAT registration level being at £85K and thinking most cleaning contractors you send work won't be VAT registered. If most are not VAT registered then if effects your bottom line in a massive way.
For those of you who have been in this industry for a while can you share your experience regarding what percentage of people are VAT registered? And what percentage are not?
Are my numbers way off and lots of cleaners do get themselves VAT registered?