But yes of course they actually run a business, however, their role has much more in common with a job than it does with a ‘traditional’ business.

And this is where I think ‘professional’ adviser have to reassess what they consider to be a ‘proper’ business. I agree that in the modern day what you describe is definitely a business, a micro-business, but none the less very much a business, and this is something I feel a lot of advisers don’t understand.

They seem to feel that unless you grow or build something big you are not in business, well that’s just not true, and for many and varied reasons.

And the VAT threshold as you describe is actually very harmful to many small business that can’t pass on their costs.

I come down very firmly on the side of them “running a business” - been there done that (only for 6 months I admit!).

Re the VAT registration - I knew one couple who were adamant they didn’t want to grow their landscape gardening business above the VAT threshold. They were selling to the public and so would have had to put their prices up - or else make a lower profit - if they registered for VAT.

There are people who might say that means they’re not really in business.

I say it means they need a sympathetic accountant who listens to them, understands what they really want and doesn’t try and push them to grow if all they want to do is tick along and pay the bills - and not have to charge VAT.

M

Ask yourself, do you really want to be VAT registered, it can be a headache, and that’s only the registration process these days.

For businesses that can’t add the VAT onto their sales figures then going over the limit just a bit will have a serious impact on their business.

As Stuart rightly says find an accountant who can also act as a business advisor to you and your business, someone who will and can add value.

Big savings can be made by keeping your turnover below the registration limit, delaying registration, picking the best time to register, choosing the appropriate method of calculating VAT but you won’t receive this advice from H.M. Revenue & Customs and you won’t receive it from the majority of accountants.

Choose an accountant who is also a business advisor.