View Full Version : VAT issue for home business
gg_dagg
18th April 2005, 01:32
I want to run my e-commerce at home. I haven't registered as a limited company yet. if i want to sell staffs on my website, do i need my customers pay VAT on each product they buy? Could somebody give me some ideas about this issue?
Many thanks
gg_dagg
:roll:
Top Hat
18th April 2005, 09:26
You don't need to register for VAT until you go over the annual turnover threshold (around £55,000)
Most businesses are better off not registering for VAT until they have to (though there are some exceptions)
My tip would be, if selling to consumers, price up your goods/services as if you are paying VAT, so your customers don’t suddenly get a price hike when you register for VAT, and you get to be extra profitable when just starting out
BMS
18th April 2005, 12:43
Hi qq_dagg
As Top Hat says there are no VAT issues until you reach the turnover threshold (actually £58K) so you doon't have to worry about it until you get close to that.
If you mainly deal with LTD companies it won't matter to them if you are charging VAT as they will offset this against their tax liability anyway.
There are pro's and con's for vat registration or more specifically flat rat vate registration as you pay less to Custums than you charge to your clients hence the difference is an increase in profit margin
Alpha
18th April 2005, 18:39
Could you all try to keep up to date ........It is now £60k :D :D
BMS
18th April 2005, 18:55
Alpha
When did that change, have a VAT 700/1 supplement dated June 2004 and it states £58k ?......................Sorry Alpha you are right it went up to £60k in the 1st April.
Thanks for the heads up Alpha
Not sure I agree with some of the posts here - may just be terminology
If you deal mainly with VAT registered businesses then you would be better off registering voluntarily before you hit the registration turnover.
If you deal mainly with consumers, as one of the posts suggests, then they cannot recover the VAT so it is best not to register until you have to. Also as stated is is best to charge consumers the full price from the outset so there is not a price hike when you register and you make the extra profit in the meantime - though if you can charge £117.50 as it is the market price, I guess you wouldn't just charge £100.
Graham
Just to clarify - Do not presume that Limited companies can offset VAT. Limited companies and soletraders alike have to register for VAT at the £60K threshold. Many small LTD's do not register for VAT until necessary as it makes them less competitive on price.
Mike.
Just to throw another thought into the pot.
Is this a VAT issue or a profit margin issue, if it is the latter and your prices are set to be as competitive as possible then adding VAT will cause you an issue, obviously a 17 1/2 % price increase (assuming your goods attract standard rate) will have an effect on any possible profit margin.
However if this is purely a VAT issure, ie do register or not to register then maybe you could also consider flat rate scheme.
If your input tax is predicted to be quite low then you may actually be better of with this shceme as you are assigned a flat rate perecentage depending on your business. This may be only as high as 13.5 percent and hence you will gain.
ie you charge your customer net + 17.5%
and you pay 13.5% of gross to Customs
charge £10 + £1.75vat = £11.75
pay customs £11.75 x 13.5% = £1.59
margin on VAT alone = £0.16
However it dependson the type of business you are in as to whether you would be eligible.
Black sheep
11th May 2005, 18:19
hi i need help looking for softwere for my business to be.
I need bookkeeping and payroll cant find it anywhere and would rather do it myself then someone else
many thanks
Hi Blacksheep
You might need to give us a little bit more information on the size of the business and the number of employees.
Not sure about the cost of payroll software but depending on the number of employees and the costs involved it might be cheaper to outsource the payroll side to a payroll bureau (sorry thats a bit of an indirect plug but it might be prudent to think about it)
There should be loads of accounts software advice here just keep watching.
Black sheep
12th May 2005, 19:24
if i go with cleaning over the first year i would hope to have about 27 empolyees
Alpha
12th May 2005, 19:36
If you are going to be running a company with 27 employees I would get someone else in to look after the payroll unless you are well up on legislation and will definately have enough time in between all the other activities that you will need to carry out. It may be worth getting someone in part time who can do the book keeping and payroll or if there isnt enough hours available for someone to do then outsource it to someone like BMS.
Black sheep
12th May 2005, 19:37
I HAVE PUT YOUR WEB SITE IN MY BOOKMARK JUST IN CASE
Black sheep
12th May 2005, 20:51
outsourse to bms who are they,what do i look for, how do i know its a proper company, how do i cheak on them
a lot of QS
Black sheep
12th May 2005, 20:55
outsourse to bms who are they,what do i look for, how do i know its a proper company, how do i cheak on them
a lot of QS JUST FOUND OUT WHO BMS IS i put them in my bookmark silly me
Blacksheep
Would have been as easy to ask me direct rather than post the above link.
We are Business Management Solutions (UK) Ltd
You can get an idea of what we do by following the link in our URL, but to save you time we specialise in bookkeeping and payroll solutions for small companies and sole traders
We were incorporated in December 2004 and you can carry out a registration search by visiting companies house website.
If you require any more information please feel free to PM me.
Alpha
12th May 2005, 21:26
Black sheep
Ewe obviously have to be careful about choosing suppliers to rely on. But usually on here its not like leading a lamb to the slaughter, I'm sure that Paul (BMS) will not fleece you. Just send hima PM and he will supply you with all info you need.
My light hearted relief to the end of the day. I just couldnt resist it...........Sorry :D
Alpha
The subtle welsh jokes may have eweluded all but the most intelligent of welsh people.
Paul
South Wales Valley Boy
Black sheep
12th May 2005, 22:04
what part of the valleys are u from welsh boy
Hi Blacksheep
Gwent - Blaenau Gwent - Abertillery........to be specific.
Whereabouts are you based ?
Black sheep
13th May 2005, 08:00
In the clouds lol tredegar
Allright mate
Can't get much closer than that then...it's a small world........
PM me if you need any help with the business...We will give you the Welsh rates !!!!!!!!
Black sheep
13th May 2005, 19:08
As i am a paddy, i am not sure if welsh rates are a good deal or not lol
xxdxxd2004
21st May 2005, 07:46
I want to run my e-commerce at home. I haven't registered as a limited company yet. if i want to sell staffs on my website, do i need my customers pay VAT on each product they buy? Could somebody give me some ideas about this issue?
Many thanks
gg_dagg
:roll:
excuse me,what kind of products do you sell?