as you will all probably know already, just before the start of the 2012-2013 tax year, i was about to hit the threshold which would require me to register for VAT. throughout this tax year, i’ve been VAT-registered, and have had to add an extra 20% tax to everything i sell within the UK/EU. it’s meant that my prices (within the UK/EU) have increased – in some cases by a fairly big margin, especially for things like club memberships (alas, this extra money doesn’t go to me, but gets passed straight on to the taxman!). it’s also meant that my workload in terms of accounting & admin has increased, as has the amount of money i have to pay out in taxes & fees (by quite a lot!).
unfortunately, it’s also meant that my sales have dropped considerably compared to previous years – i know we all have a lot less money at the moment, and that an extra 20% can make a huge difference. as a result, my turnover this year has dropped to such an extent that i’m now no longer legally required to be VAT registered – and frankly, i’ve come to the conclusion that unless i can hugely increase my productivity (which would probably mean hiring other people do to all my admin & web work, and most likely some of the dyeing as well), i may never make enough sales to make up the gap between what i earned before VAT and what i’ve earned this year.
i really don’t want to change the way i do business – i love doing everything myself, and keeping in touch with all my customers, and wouldn’t want to have it any other way. so i’ve decided that i will be much better off financially – and much happier! – if i de-register for VAT, and simply produce/sell enough yarn so that my yearly turnover stays below the VAT threshold for the foreseeable future. i submitted all the necessary paperwork, and have just had it confirmed by HMRC that as of 31st march 2013, Old Maiden Aunt Yarns will no longer be VAT registered.
here’s what this will mean for you, my lovely customers!! the studio will be closed, and the web shop will be empty, from 1st-6th april – this will give me enough time to do an end-of-year stocktake, finalise my 2012-2013 VAT accounts, pay the taxman any VAT that i still owe, and remove the VAT prices from the website. once i’ve removed the VAT from everything, i’ll be re-working my price structure slightly. most of my yarns will simply go back to the price they were last year, before this whole VAT debacle started; there are a few that will be a little cheaper, and a couple that will be a little more expensive, but all of them will be VAT-free (hurrah!). i won’t be restocking any yarns while this is happening, but i am still dyeing various things, so when the shop re-opens there should be a good number of yarns back in stock. throughout the year, i will also be limiting my production levels very slightly, to ensure that i stay below the VAT threshold, and don’t have to go through this awfulness ever again. based on sales from this year & previous years, this shouldn’t mean that anything becomes harder to get hold of – i’ll certainly continue to do my best to make sure that you can all still get your regular yarn fix!!
i hope you can all understand why things have gone the way they have this past year, and aren’t too annoyed at the changes. i’m doing this job because i love it – i love dyeing yarn, i love seeing what you all make with it, and i love the knitting community & my wonderful customers. but i also love being able to pay my mortgage, and buy groceries, and put petrol in the car, which means performing a constant balancing act between what’s fair & kind for my customers, and what will help my business & my profitability. for obvious reasons, i can’t go into every financial detail on the web, but if you have any questions or concerns, please ask here in the comments or over on the discussion thread in the Old Maiden Aunt group on Ravelry, and i’ll do my best to answer. and as always, thank you all so much for another year of being able to do what i love – i wouldn’t be here without you.