Hi,
I originally posted on DigitalPoint forums regarding my next move to help gain a greater market share, my post from there went like this;
"I haven't ever asked for advice, or took any guidance so far since establishing my company in Nov 2008.
I want to make clear, this thread is not me trying to advertise myself, I'm asking for views on where I can look further head to next to increase sales.
So.. I established on the 8th November 2008 and came up with << company name removed >>, so far, not including domain reseller investment, I have broke even the first month, and am close to breaking even second month.
I currently believe, I would stand in the top 15 'professional' UK providers if it came to "cheap" (I prefer the term affordable) hosting, as well as resellers located in the UK, maybe not Europe.
I have submitted to one or two hosting directories which have got me a bit of traffic, however nothing which is beating the 300 UV mark.
If you review the pricing on the site, I think people will agree that domains are slightly higher priced than elseware, (well 123-reg.co.uk are £8.99 without hosting). The reasoning for this is because of poor exchange rate from USD to GBP."
I was asked about conversion rate from views to sales which I worked out to be a 3%.
After this, I got a few replies on there, somebody recommended coming here and seeing if I can get a few tips.
I don't know if this place is directly mainly at the US.
All advice and questions are welcomed

I would stand in the top 15 'professional' UK providers if it came to "cheap" (I prefer the term affordable) hosting
Based on what criteria ? Out of the 70,000 or so "hosts" of one-form-or-another in the UK, how do you think you're top 15 ?
If you review the pricing on the site, I think people will agree that domains are slightly higher priced than elseware
£10.94+vat for .uk would be considered expensive, yes.
I was asked about conversion rate from views to sales which I worked out to be a 3%.
Where are those vistors coming from ? Are you paying for them (in which case 3% is low)
You dont give any indication of who << company name removed >> are or where they are on the site - you need to read up on ecommerce laws and distance selling regulations...

Hi there,
A simple question, how can you be within the top 15 of professional uk webhosts without being legally registered?
Are you setup to legally charge VAT?
Nathaniel Freeman

Hi there,
A simple question, how can you be within the top 15 of professional uk webhosts without being legally registered?
Are you setup to legally charge VAT?
Nathaniel Freeman
To be honest, I think 15 was a bit too dream world, however I think looking at it from offering competitive prices and searching through top Google Rankings I am considerably competitive. However, I don't have a strong name which isn't recognised as I'm new the hosting business in the UK.
Yes I am registered with HMRC to charge VAT.

Are you registered with companies house?
Where is your VAT registration number on the website?
I think you need to scratch up on what is required by UK Law for a business to have on their website before you can be considered professional.

Based on what criteria ? Out of the 70,000 or so "hosts" of one-form-or-another in the UK, how do you think you're top 15 ?
£10.94+vat for .uk would be considered expensive, yes.
Where are those vistors coming from ? Are you paying for them (in which case 3% is low)
You dont give any indication of who << company name removed >> are or where they are on the site - you need to read up on ecommerce laws and distance selling regulations...
Its because exchange rate is awful from USD to GBP, I find it difficult to work around PayPal fees, I am working on reducing prices in the new year.
Traffic is entirly organic, coming from search engines and a few directory submissions.
I am currently working on the next update for the site which is to include an "About" section of the site.
"you need to read up on ecommerce laws and distance selling regulations..." - by this you mean?

Are you registered with companies house?
Where is your VAT registration number on the website?
I think you need to scratch up on what is required by UK Law for a business to have on their website before you can be considered professional.
No, I'm not registered with companies house.
VAT registration number will be added in next update due 2nd January, its only recently I have registered and recieved confirmation and VAT number.
I know a lot of work is needed to get it up to a "Professional" standard, hence why I post.
Many thanks for the responses.

well congrats on your new business - i am in the uk and will be startng a hostin business called << URL removed >> ( not up yet )

Can I ask why you want to register for VAT when your not meeting the threshold? Or am I mistaken?

registering for VAT in uk is optional as long as your gross income is less than £50,000 per year (may be wrong on that figure, but it was correct when i was looking into it about 3 years ago).
The only reason a company with a lower turnover would register for VAT is if they were paying a lot of VAT to their suppliers, but even then its not always that worthwhile

registering for VAT in uk is optional as long as your gross income is less than £50,000 per year (may be wrong on that figure, but it was correct when i was looking into it about 3 years ago).
The only reason a company with a lower turnover would register for VAT is if they were paying a lot of VAT to their suppliers, but even then its not always that worthwhile
Its £67k now or £70k if distance selling. :)

I claim VAT back on my current rented servers, and I plan to build 2 servers in the next month, every penny helps when its all self funded.
I decided to charge VAT because I plan to launch rental of dedicated servers hopefully within the next 2/3 months, by then I know income will increase largely through the introduction of Dedicated Servers

But the point im trying to make is that is it really worth it?
We sell dedicated but dont charge VAT as it can be a pain accounting etc.
Like railto said are you paying that much money to your suppliers to justify it? Or do you just want to seem bigger?
I'm not having a go here just putting in my 2c worth :)

But the point im trying to make is that is it really worth it?
We sell dedicated but dont charge VAT as it can be a pain accounting etc.
Like railto said are you paying that much money to your suppliers to justify it? Or do you just want to seem bigger?
I'm not having a go here just putting in my 2c worth :)
1) If you are selling B2B, most will want to reclaim the VAT, that's a little difficult when you didn't charge it in the first place.
2) You are probably paying a considerable amount of VAT on your hardware/monthly costs that you could reclaim. Remember when you register you can claim back the VAT on the past three years worth of capital equipment purchases.
3) It's perfectly simple from an accounting perspective as long as you are keeping proper records (which I would hope you are).
4) You're better introducing it early on, since when you reach the threshold you'll either need to cut your earnings to make room for the VAT and keep prices the same, or increase your prices.
As an aside, you need to put your registered office address on your website.
Dan

But the point im trying to make is that is it really worth it?
We sell dedicated but dont charge VAT as it can be a pain accounting etc.
Like railto said are you paying that much money to your suppliers to justify it? Or do you just want to seem bigger?
I'm not having a go here just putting in my 2c worth :)
I understand your not having ago, I don't care if anybody does really, I'm here for opinions, suggestions and advice. I'm getting what I came here for!
I use ClientExec that does all my accounting for me near enough, tells me VAT etc, however, from that I have to deduct PayPal fees, I have a Excel system I designed which works this out once monthly income is punched in.
I'm not claiming a great deal back, however it still makes a difference to me. (I'm a student with spare time).
1) If you are selling B2B, most will want to reclaim the VAT, that's a little difficult when you didn't charge it in the first place.
2) You are probably paying a considerable amount of VAT on your hardware/monthly costs that you could reclaim. Remember when you register you can claim back the VAT on the past three years worth of capital equipment purchases.
3) It's perfectly simple from an accounting perspective as long as you are keeping proper records (which I would hope you are).
4) You're better introducing it early on, since when you reach the threshold you'll either need to cut your earnings to make room for the VAT and keep prices the same, or increase your prices.
As an aside, you need to put your registered office address on your website.
Dan
Thats my perspective on it, I do not "claim" an income from the company as money is just recycled and I have hosting which I require, I've enjoyed doing it all (so far).
Yes, I plan to stick a lot of details in regarding VAT regulations, office address as of the new site update released on Friday.
James

James: People keep banging on about VAT, which you dont have to have until your nearing 60k ( about t hat, but i am sure a smart *** will give you the exact figure ). And when you are nearing it you can back date upto 6 months on vat purchases. Also, you dont need to become a ltd company to be "professional" etc - sole trade, co-op, partnership etc etc. Ltd company has some tax advantages and limited liability in relation credit - in terms of genral liability good ol insurance covers.

<< removed response to removed post >>
James: We started our company 18 months ago and we are based in the UK. We registered for VAT out of choice, as it looks more professional to our business customers.
As a registered company with Companies House, you need to display your registration ID number and registered office address on every page.
Also regarding the prices you are charging, its not that expensive if you are dealing with the DNS for your clients. Our hosting and domains are a bit more expensive then usual as we manage it all for them and as we are a B2B company its what our clients want.

<< removed response to removed post >>
like most people james you have started pricing cheaply and when you have a few more customers then up your prices slowly

We start in January of this year, soon to be last year, we aswell chose to be VAT registered. Just another tick of the list in some potential clients books.
Personally, I would study some uk business law, couple of good books and you should have the basics to build your knowledge on.
Guys, give the guy a break, we ALL started somewhere and we ALL didn't start thinking we know everything. Give the lad a chance :P

Thanks for the replies.
On the VAT topic, I did it because its beneficial for the near & further future.
Well I know where I'm aiming to be in three months, and although I'm a newbie company, I ran a game hosting company for 2 years which has gave me enough experience in confidence to run << company name removed >>. :)
I'll be looking to register at the Companies House in the start of the New Year.
Thanks for the advice everyone. :)

I use ClientExec that does all my accounting for me near enough, tells me VAT etc, however, from that I have to deduct PayPal fees, I have a Excel system I designed which works this out once monthly income is punched in.Just a quick note on Client Exec. It does not handle VAT properly in the current release although from my chats with Alberto this is something that they are going to fix in the next release which will be going into public beta soon. We spent a good chunk of cash on custom development work to get this to work properly though as it was too big a thing for us to handle manually.
If you are a UK VAT registered business providing web hosting services then you should charge VAT to both individuals and businesses in the UK and businesses can then reclaim. If you are providing services to businesses in another EU country (e.g. France, Germany etc.) then you should not charge them VAT providing they provide you with a valid VAT registration number. Client Exec does not support collecting the VAT number from customers, looking up the VAT number against the EC database and then deducting the VAT from the invoice if the number is valid.
- Chris

Just a quick note on Client Exec. It does not handle VAT properly in the current release although from my chats with Alberto this is something that they are going to fix in the next release which will be going into public beta soon. We spent a good chunk of cash on custom development work to get this to work properly though as it was too big a thing for us to handle manually.
If you are a UK VAT registered business providing web hosting services then you should charge VAT to both individuals and businesses in the UK and businesses can then reclaim. If you are providing services to businesses in another EU country (e.g. France, Germany etc.) then you should not charge them VAT providing they provide you with a valid VAT registration number. Client Exec does not support collecting the VAT number from customers, looking up the VAT number against the EC database and then deducting the VAT from the invoice if the number is valid.
- Chris
Hi, sorry for the late reply been busy with revision / work lately.
ClientExec doesn't handle it correctly I know, it has some features which say the income and tax collected, however if I am correct I am deducting the VAT after PayPal fees / Google fees when I start to use Google Checkout. I am waiting for the next release rather than fiddling with settings, and using an Excel sheet I have developed to work out VAT payments.
If somebody comes to me to reclaim VAT from outside the UK and can provide their VAT number I would happily refund the VAT (bearing in mind its valid).
I'm currently planning to implement a few changes over the next week or so mentioned by other users in this thread, however exams are getting in the way at the minute.
Many thanks for advice.