Approaching Vat threshold. Should I take a holiday?

Would like to get your opinions on something. Seems nobody I know knows a damn thing.
Feel like I'm stuck between a rock and a hard place.

I'm a freelance musician (yes, who does pays taxes), I've had a particularly good year and I'm now approaching the VAT threshold. I've calculated that with everything I've booked in by the end of the year, I'll be 200 euro below the limit!

The issues:
- The majority of my work is with arts organisations and like, many of which get grant funding so I presume, would be exempt from VAT. So if I were to have to charge VAT, they wouldn't be able to claim it back. I don't really do the "showbiz" type corporate gigs (who I assume wouldn't care if I charged VAT).
- The vast majority of musicians I know aren't VAT registered (in fact, I don't know a single one, anybody I've asked looks at me like I've 2 heads). This means that the "market" is not used to the vat aspect so I would immediately be at a disadvantage (and scare people away).
- Generally, we don't negotiate our fee. We just get told "here are the dates, here is the fee, are you available?". I'd have to take the VAT hit, otherwise they'd just get someone else. I'm sure I'm not the only person with this issue though.

Here are what I see as my options:
- Register for VAT and take a huge hit (probably around €5k including vat back on my expenses). This would really suck. I feel that I should be rewarded for having done well, not punished! I'm becoming less socialist by the minute!
- Do some PAYE work
- Take on some teaching (which would be VAT exempt)
- Put on my own gigs (where the ticket sales would then be VAT exempt)
- Take a holiday

What do you think? Do you see any other (non-punitive) options?

Also, putting down a figure on the tax return that's so close to the threshold, should I expect a certain audit?

BTW, I bought an expensive bit of gear earlier this year. If I had known I might have to register, I would have held back so I could claim the vat back!

Thanks in advance to your replies

The Revenue requirement is that you are required to register if you turnover exceeds €37,500 or you expect it to.

I would do all that I could to stay out of the Vat net. If you are vat registered you have already worked out that you will pay the vat. You don't have the option of charging your performance fee plus vat - you'll get paid a flat fee whether you are registered or not. You will only get vat back from the date you register and not before. In addition to the cost you are also entering another tax with all the record keeping and audit verification etc

I'm not sure I'd agree that teaching and putting on your own gigs are vat exempt - I'm not saying that they aren't but I'm not a vat specialist and don't know the technical position.
Best of luck in any event

Almost certainly the provision of music lessons is a VATable activity. You could be okay re the concerts, if not in a pub/club etc. Greater minds than mine will know better ...

Thanks guys. Just getting some ideas.
Let's hope they raise the threshold in the budget ...

Revenue link about music lessons: revenue.ie/en/tax/vat/rates/decision-detail-03755.jsp
I also do some outreach work every now and then and would get paid by the local ETB for this.

Regarding the concerts, I mean strictly a performance (more like a classical performance in a dedicated venue, not a pub/club setup). Basically, in a venue where food and drink can't be consumed during the performance, such as a theatre show, etc. Here's the revenue link (section 6): revenue.ie/en/tax/vat/leaflets/vat-treatment-right-of-admission.html#section6

What about income earned in the UK. Does that count towards the threshold?

For vat purposes only income earned in Ireland is liable to Vat. UK registration threshold is substantially higher - somewhere around STG£55K or thereabouts

You need proper professional advice here. VAT thresholds are tricky and the Revenue can go to town on you if you slip up.

T McGibney said:

You need proper professional advice here. VAT thresholds are tricky and the Revenue can go to town on you if you slip up.

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I doubt you will find an accountant who has a better handle on this than you do.

I also think you have the options clear, you should give lessons, definitely VAT exempt, put on gigs, didn't realise they were Vat exempt, and if that doesn't keep you below the threshold, take a holiday.

Be organised around your record keeping so that you can show that your recorded income is complete.

As a last comment, if VAT is a reason to give up on your socialism, you should meets business rates.

That's great, thanks everyone!
I have an accountant who deals with a lot of this kind of stuff.
I just wanted to get some opinions, etc, so I know what questions to ask.

Something else I realised.
A lot of my expenses are petrol and accommodation bills.
Guess I can't claim VAT back on those, happy days ...

At I learnt as a tax trainee - the seven deadly sins of vat. Not very exciting but cars, petrol, employee subsistence, meals of any type, accommodation are items that you won't get the vat back on. Slight variation now with conference expenses but that is it - not a vat specialist and subject to correction.