Start Up Vat Help

Mark Tindale · Apr 30, 2019

Hi

I'm looking for some advice. We are a new start up and we have set up as a ltd company.

I expect our first year turnover to be between 70k-100k, we are not yet set up for vat.

Am I right in thinking we don't have to do this until we hit the vat threshold of 85k?

I know very little about vat at the moment. On 100k turnover, we would have purchases of roughly 15k plus machine, rent and utility costs of 30k.

At the moment we sell 100% to the public via ebay, amazon and our website. So I'm thinking vat for us will be especially bad and affect our sales?

Is there any easy way to calculate what we should expect to pay.

Thanks in advance

Mark moto-cnc.com

Scalloway · Apr 30, 2019

Mark Tindale said:
Am I right in thinking we don't have to do this until we hit the vat threshold of 85k?

Yes

Mark Tindale said:
At the moment we sell 100% to the public via ebay, amazon and our website. So I'm thinking vat for us will be especially bad and affect our sales?

If you are selling to private individuals then they will not be able to reclaim the VAT so it may influence whether they buy if other sellers are able to sell without VAT.

Mark Tindale said:
Is there any easy way to calculate what we should expect to pay.

There are two ways to work with VAT. There is the traditional method where you calculate the VAT payable on sales at 20% then deduct VAT you have been charged.

The other method is Flat Rate VAT. You decide what category your business falls under and pay over a fixed percentage of your sales every quarter. You do not reclaim VAT you have been charged except for capital items costing over £2,000. More information here.

https://www.gov.uk/vat-flat-rate-scheme/how-much-you-pay

Search

Search

Start Up Vat Help

Mark Tindale

Scalloway

Latest Articles