Being VAT registered or NOT being VAT registered??'

[diederik]

Hi to All members of this forum.. I have a trouble or should I say, I can't decide should I apply for VAT number or not..??
My company is active for short time now. We are about to start trading mainly beetwen Denmark and Italy. We will be acting as a distributor for Italian market selling to Italian companies..Manufacturer in Denmark is VAT registered, 3 companies that we are going to deal with in Italy are VAT registered our company in UK is NOT VAT registered.
My main concern is what to do???.. If we (example) buy product in Denmark (25% VAT) and sell it to Italy (20%VAT).

(Example) Product cost of £1.000 + 25%(£250) = £ 1.250 if they charge us
a VAT in Denmark..How do we sell it than to Italy where they have 20% VAT? Will we be in advantage being VAT registered or not? (17.5% of VAT in UK...)

I'm all confused since we are not even close to £ 61.000 when there is mandatory to register for VAT in UK.
Basically I' m addressing this questions to all experienced members of this forum to help me out.
Please help out with your advice :|.

:| Diederik

 

[Kent Accountant]

Far too complicated for me to know the answer to

However, I would be concerned about the requirement to register in the country in which the supply is being made, which is necessary in some cases. Some countries have a zero or very low threshold for VAT registration

 

[Calibre Designs]

I am no legal dude or an accountant (by far actually)...but I do know that if your turnover is projected to be more than £64K (current figure I do believe) then it is worth you registering for VAT now. You do not have to wait until you hit that mark.

...correct me if I am wrong accountants...

 

[KM-Tiger]

You do not have to wait until you hit that mark.

No, you don't. In fact you don't need any turnover at all, you just need to demonstrate an intention to trade.

As Kent Accountant pointed out, trading in different European countries is complex, and the OP would do well to get expert advice on this.

 

[Calibre Designs]

Wow...I got this right.

I have to show this to my accountant to prove that I actually do listen to his "lectures". He just thinks that I day dream when he talks.

 

[flck72]

Talking of dreams...

"Twenty years from now you will be more disappointed by the things that you didn't do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbour. Catch the trade winds in your sails. Explore. Dream. Discover." - Mark Twain (left-handed BTW)

 

[Basement_Studios_Ltd]

Okay - i'll drop a spanner into the works with this....

If you purchase goods from a company from an EU country but are not vat registered then they will have to charge you vat at the full rate (regardless of where you live). So they will charge you say the cost + 25%, your cost is then + 25%.

I would get yourself an accountant that has experience with EU trading and get VAT registered as soon as you can.

With ref to your UK customer - if they are not vat registered they can't be turning over £64+ or, aren't running things correctly....most businesses that are in manftr'ing or distrib are vat reg!

Hope this helps.


Rob Skinner

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*All information given in a post is general information, responding to a general enquiry. For a detailed consultation in reference to the specifics of your enquiry, please PM us.

 

[galide]

Being VAT registered brings also some credibility to your business.

Emmanuel

 

[Jacqui123]

Hi Everyone,

Can someone tell me, if you are not VAT registered, the margin scheme does not apply to you, if your buying ad selling second hand items, from a not vatable source??:|

Thanks Jacqui

 

[sigmus]

Best way is to be VAT registered and buy or sell your goods with 0 VAT.
No one in EU will not sell you nothing without VAT if you are not registered to it !

 

[RBS]

If I register as sole trader and I HOPE to have more than 60k turnover, can I register for VAT? Also, if I`m not VAT registred and I do 61k, will I get taxed on 61k or just 1k?

 

[RAL]

If I register as sole trader and I HOPE to have more than 60k turnover, can I register for VAT?

Yes, you can register voluntarily.

Also, if I`m not VAT registred and I do 61k, will I get taxed on 61k or just 1k?

The threshold for current year is £68,000. So if you go over the threshold all of your supply will be subject to vat. But your user name suggest you are a CCTV guy. So most likely you will be dealing with the business and if your customers are vat registered business then it makes sense to register vat voluntarily.

BTW, do you do HD CCTV recording?

 

[RBS]

RAL, but if I dont make over 68k then what? Do I get penalty for not reaching treshold?

Yes, 90 % of all installations I do, they are HD, minimums 1.3 megapixel cameras.

 

[Williams lester]

but if I dont make over 68k then what? Do I get penalty for not reaching treshold?

If you make a voluntary registration it does not matter what your turnover is, you must charge VAT on all sales from the registration date onwards. There is no penalty for not reaching the threshold.

 

[RBS]

Does it mean then, I get both, input VAT and output? So, its like limited company then? Also, if I`m registered, then I need to do VAT report once a quarter?

 

[Williams lester]

Does it mean then, I get both, input VAT and output? So, its like limited company then? Also, if I`m registered, then I need to do VAT report once a quarter?

Hi Rob, there is no differentiation between limited co/sole trader/partnership for VAT purposes...so, yes you get input VAT to offset against output VAT.

Assuming you are not on the VAT annual accounting scheme you would normally expect to complete a VAT return quarterly.

 

[gabrielealessi]

Hi to All members of this forum.. I have a trouble or should I say, I can't decide should I apply for VAT number or not..??
My company is active for short time now. We are about to start trading mainly beetwen Denmark and Italy. We will be acting as a distributor for Italian market selling to Italian companies..Manufacturer in Denmark is VAT registered, 3 companies that we are going to deal with in Italy are VAT registered our company in UK is NOT VAT registered.
My main concern is what to do???.. If we (example) buy product in Denmark (25% VAT) and sell it to Italy (20%VAT).

(Example) Product cost of £1.000 + 25%(£250) = £ 1.250 if they charge us
a VAT in Denmark..How do we sell it than to Italy where they have 20% VAT? Will we be in advantage being VAT registered or not? (17.5% of VAT in UK...)

I'm all confused since we are not even close to £ 61.000 when there is mandatory to register for VAT in UK.
Basically I' m addressing this questions to all experienced members of this forum to help me out.
Please help out with your advice :|.

:| Diederik

Dear Sir, I am in your same case: Limited company non VAT registered, trading between 2 european diferent countries with VAT registered supplier and VAT registered customer in their respective countries.
I pay the VAT to my supplier (his local national VAT) and i know that i cannot claim it back. (as i do not have UK VAT)
My doubt is how to invoice my Client : It is correct to invoice my european client (who is VAT registered in his country) without mentioning any VAT ? (i cannot mention UK VAT as i am not UK VaT registered , but it is correct to invoice like that ? thank you very much .