Sole Trader and VAT

[samkma]

I am a sole trader and sell mainly on eBay and my website (b2c) I wanted to go wholesale (B2B) and have registered voluntarily for VAT 2 weeks ago and have received the VAT number yesterday, but now due to some personal reasons I do not want to start the B2B for the time being and continue as a B2C, I am well below the VAT threshold. So can I cancel my VAT registration? I have not charged my customers VAT (as I have not changed my prices) since I registered, so will the HMRC accept my cancellation?

[Blackberry]

Have you received confirmation of your registration yet from HMRC?

Give them a call and they will advise you what to do, in cases like this they will usually cancel the registration without any problems.

[spidersong]

If you are trading below the limit you can cancel from a current date, they will not backdate it to your date of registration, and have no discretion to allow any form of backdating.

This means that although you may not have issued any VAT invoices you will be required to account for VAT on sales you've made between your date of registration and the current date (or whenever you get the application to deregister completed which I'd suggest you do immediately).

I'm afraid you have created a VAT liability for yourself, however you may be able to offset this with any VAT you've been charged on goods you had on hand at the date of registration, and VAT on services you've received in the 6 months prior to your registration, since you can claim back the VAT on these items on your first return.

This may not have any major benefit for you however as when you deregister you normally have to pay back to HMRC VAT you've reclaimed on assets that you still have on hand at the time of deregistration, so in effect you might have to claim it back and then pay it back again (probably on the same return).

BUT the payback is based on a current market value, whereas the claim is on the original purchase price so if the goods have depreciated you may get some benefit from this.

ALSO if the market value of goods/assets on which you claim back VAT is under £6666 (i.e if you claim less than £1000 of VAT on your assets) then you wont have to declare these on your final return either, so there's a chance you may actually come out ahead on this.

Hope this helps

[samkma]

Thank you all for the reply,
I decided to be VAT registered as I have stock that can help me start the wholesale maybe this could be the begining of a bulk trade? Now I sell on ebay and www so to account for vat do I have to have a vat invoice for every single sale or just keep record of the sale price, postage costs and the VAT on those figures, can I consolidate a days sale individually into one invoice every day as my customers B2C do not require an invoice.

[spidersong]

You don't need to raise a VAT invoice unless you're selling to VAT registered businesses, so as long as you have records that show how much you've taken in the period you're registered for then that's really all you'll need.