Materials aren't a huge part of your cost I would imagine.
If contracting is the major part of your business then register for VAT. If domestic is your major part then stay unregistered. Unfortunately business is never simple and straightforward and you have to make decisions based on the information available to you at the time.
For me, working on sites is not what I want to do so I set up my business so that I don't charge VAT.
As it is, I am fully conversant with VAT regulations and can operate it without any problems via my accounting package and my experience with my accounting business so it would be easy for me to change and become registered.
For people that have not dealt with VAT before it is not something to be taken on lightly. Many rules and regs to abide by not least the cash you have to pay out every 3 months! Complicate this further by having CIS deductions made for the net amount of vatable invoices, excluding materials and your book keeping takes on a whole new dimension.
Domestic customers for me for now!
