In my case Will it be benefical to me to become VAT registered?

[Butterfly07]

Hi there. I am a new bussiness operating as a sole trader. I have been trading since mid-Feb using a marketplace. I am currently in the progress of setting up my own website.

As Im so new I wasnt going to bother getting VAT registered due to the sheer hassle and having to charge customers more money- plus someone said I could be worse off in the end?

However nearly all the suppliers I want to for my own site happen to be overseas (mainly Denmark and one French and one Swedish). So far all have had to charge me 25% VAT. I have probably spent £1000 in VAT alone now.

Would I be better off getting VAT regsitered so I can get all this money back? Or still not worth it until I reach the 60k mark?

Thank you in advance!

[elainec100@cheapaccounting]

Can you customers reclaim the vat?

If no - will your price still be competitive if vat is added (which it would need to be once you reach the £70k reg threshold)?

All down to pricing really.

[Butterfly07]

Hi thanks for the reply.

No the customers will be the general public buying for largely personal use.

I could probably charge higher on my own webite as there as few people in the UK selling these brands online but, as for the marektplace it would be hard with certain products where 1-2 other sellers have the same lines and my margains are already low with market place tkaing 30% on total sale (including the p&p!)

[sanjiv]

You need to look at the figures for cost price and sale prices before VAT registration and after VAT registration. Compare the figures and then calculate whats best.