Hi
my problem is VAT related, I been mucking around with websites for people for some time and decided to make one for myself and was selling gear on commision only basis and VAT was being taken on my suppliers VAT number, site really took off and people seem to like dealing with me and I am now turning over about £2000+ per week and to bring down prices I have started to order the products direct - so now not using friends VAT. should I register for VAT now? or as I am under threshold can I just not charge VAT or what do I do please?
I got my first direct order in on Friday and have already sold £1000 worth and charged VAT (wrong VAT number) so need to sort this out asap, but obviously too dim.
thanks
LS
If you're turning over £2k a week it's time to get yourself a good accountant. Trying to do it yourself will only hold you back in the long term. Hire someone who knows what they are doing then you'll be free to grow the business without having to worry about it. Just make sure you keep a track of all incomings and ongoings with something like Sage, but speak to the accountant first as they'll give you advice on what package they prefer you to use.
if you are buying and selling vat products then it makes sense to be full vat registered.
If you are selling more than buying, then it might make sense to be flat vat registered (simplified accounting, you keep some of the vat back, but can't claim on purchases).
You can't charge vat if you are not vat registered, but in the same way you can't claim vat back on purchases.
You don't need to be over the threshold to be vat registered, I'm flat vat registered as it makes me 4% on my invoices, but my turnover is small.
Either way, it sounds like you have/are doing something illegal, if HMRC found out you would might be liable to all taxes backdated and a huge fine/possible prison term.
I would speak to an accountant immediately, they will advise the best thing to do
Hi
Thank you, I have spoke to one of those taxassist place this morning and made appointment for friday. The delivery I got only arrived friday past.
thanks
LS
Turning over 2k a week will certainly require you to register for vat as you will be way above the threshold.
Any other advice let me know as I'm a Accountant.
Hi
I sell sat gear and I wont post link as it will be seen as a shameless plug, seems I busy enough as it is, only illegal - trying to get vat regged now.
LS
You don't need to register for vat until you are at the registration threshold of £70k in the last 12 months or expect it to go over that in the next 30 days.
As to whether you should it depends on the circumstances - how much vat you are paying out on purchases and general expenses and who your customers are - other vat registered businesses or joe public. If you are selling to the public who can't reclaim the vat in any event you are better of not being registered as you effectivels save the vat element of the profit, conversly if you are selling to other businesses then as you would be passing on the vat suffered on your purchases it can make you more expensive than your competitors.
More importantly have you registered with HMRC as there is a £100 fine for not doing so within 3 months. Also have you considered whether you should be operating through a ltd co. rather than as a sole trader - again the pro's/con's depend on circumstances.
If you want to pm me with any questions feel free - I am an accountant
VAT
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