A few questions need answering please.

[CS111]

Hi, im in the process of importing from China for the first time and need a few questions answering please, sorry if they sound stupid.
I am not VAT registered and will be importing approx £5000 every 2 months, into the UK.
I am learning about all the fees involved when inporting, Vat, Duty, Clearance fees etc and have a couple more questions.
Do i need to be VAT registered for customs to allow me to unload the container?, probably a 20' to begin with.
If i am not VAT registered can i claim the VAT back that i need to pay on the goods imported?
When i sell to the public, it will be an online shop, do i need to charge them VAT on the final sale price, therefore paying VAT on importing and then the pubic also payign VAT, therefore paying VAT twice.
Any help much appreciated. Thanks

 

[Jenni384]

If you are not VAT registered you must not charge anyone VAT and you do not claim back any VAT. The VAT you pay on your supplies becomes part of the gross cost.

I doubt you'd be required to register just to be allowed to offload the container. It just means any VAT you are charged will be a cost to you.

 

[fathippy]

It seems as if you are destined to be VAT registered fairly soon though ? £5000 every two months - ie £30,000 a year from one supplier would suggest to me that you should be looking for sales over the magical 67k mark. Even if it is your only supplier, the fact that it has been shipped all the way from china (i dont know whether the 5k is net or gross of carriage) would suggest that mark ups should be well in excess of 100% (just for the pure risk of the operation, and the greater disparity in pricing between here and there).

Just an educated guess, but from those import numbers I would think the decision may be taken out of your hands.

 

[3pic]

Do i need to be VAT registered for customs to allow me to unload the container?, probably a 20' to begin with.
If i am not VAT registered can i claim the VAT back that i need to pay on the goods imported?

When i sell to the public, it will be an online shop, do i need to charge them VAT on the final sale price, therefore paying VAT on importing and then the pubic also payign VAT, therefore paying VAT twice.
Any help much appreciated. Thanks

You do not need to be VAT registered to import goods into the UK. HMRC will require payment of any duty and VAT before they release the goods to you so you may have cashflow and time delay (as HMRC will only release upon funds clearing into their bank account) issues initially.

When you sell, you do not charge VAT on the final selling price or any postage either. If your sales (turnover) exceeds £67k in any 12 month period you will need to register for VAT. Under that limit and you can so voluntarily. Benefits are you can reclaim any VAT your business incurs (including the VAT charged upon import) but the down side is that you must charge VAT on your sales to your customers....so you need to weigh up higher costs to end user with VAT added may deter customers against reclaiming VAT on overheads.

Note that Duty is a seperte charge to that of VAT and that VAT is added on top of the duty so your costs will be Price of Goods + Duty + VAT. Duty is not recoverable unless the item is being re-worked or re-exported.

 

[CS111]

As i will be working from home, what would the advantages and disadvantages of becoming VAT registered?
Claiming back VAT on the imports but then having to charge buyers VAT i think would be a disadvantage.

 

[Mister B]

As i will be working from home, what would the advantages and disadvantages of becoming VAT registered?
Claiming back VAT on the imports but then having to charge buyers VAT i think would be a disadvantage.

If above the threshold, then it's a legal requirement. Probably best that you speak with an accountant

FWIW, if you do not want to register now, as least incorporate a theoretical amount of VAT into your pricing structure. I assume that you are working as a retailer and the last thing that you want is to have to put your prices up by 17.5% once you pass the threshold. Better to set the prices now and make a little bunce...at least you will be price establishing your products.

Mister B