I agree. Although I think the intention was to catch 'benefit cheats'.
Laws are in place to control this type of skulduggery and people do get caught for such things
I agree, similarly those who are not disabled, but entitled to claim benefits. The government needs to persuade 'hard working families' that they are different, and those on benefits are 'undeserving'.
I understand that. However, for years we were constantly plagued by sellers operating out of their homes, turning over fortunes without registering for VAT and being able to undercut legitimate businesses. Often these were Chinese factories with relatives over here. They would then shut down and start up somewhere else and proper businesses just couldn't compete.
Exactly what I was getting at. I remember a few years ago finding a competing seller on eBay with an address in London. When we found it on Google Earth, it was a terraced house. He was undercutting everyone in the niche, turning over hundreds of thousands a year, whilst not VAT registered and not a proper business.
You could equally argue that the VAT threshold be increased (to say £100k) to keep in line with inflation/costs!
My personal view on this is that it should either be zero or at an absolutely puffling amount - EG £5k
The amount is considerably lower. When operating a business, Value Added Tax becomes a mandatory payment. The 22K rule applies for a duration of 5 years, and surpassing it is not allowed. It functions more as a workaround for part-time or hobby businesses to stay below that threshold. If you decide to establish a limited company, a minimum of 25K in tied-up capital is required, instantly exceeding the 22K limit. Additionally, there are special provisions if you are subject to the 22K rule, but any excess funding gov support must be repaid once you surpass the 22K threshold. This brings us back to the point that VAT payment is triggered as soon as you initiate a business.
1 - if it is a true business then yes. Practically though, it is hard to know where to draw the line. If I want to sell off loads of clothes on eBay because we are having a clear out and I take a year to do it, that could be seen as a business (albeit a small and not very good one) by some without the context.
That sounds dodgy to me. For a start, if the staff all work for that one company then they are not really self employed. And this sounds like classic VAT evasion tactics. If they are using dodgy tactics and get caught the penalties are severe.
There will undoubtedly be grey areas, but in simplistic terms, selling your old stuff from the attic (or wardrobe) won't constitute a business - buying stuff in order to sell for a profit will.
100% agree. By all means keep the VAT as long as you can but plan on the basis that, if successful, you will need to register and will lose that 20% when you do.
Completely agree but from the outside it is sometimes difficult to tell the difference and even harder to write rules for it I suspect.
Unfortunately so! Plenty of companies splitting their activities up to try and stay under the threshold and have an unfair advantage over those that are doing it legitimately
Totally agree, they have been doing this for at least 5yrs, maybe longer - I know of two people in our industry who have reported them online via the government whistle blowing documents, yet they are still doing it.That sounds dodgy to me. For a start, if the staff all work for that one company then they are not really self employed. And this sounds like classic VAT evasion tactics. If they are using dodgy tactics and get caught the penalties are severe.
Have you tried calling HMRC and reporting them?
I mentioned a situation we had a few years ago in a different post somewhere. We had an online ink cartridge company and were selling a lot on eBay (as well as Amazon of course).
If you did nothing, you would lose 17% but if your supplies are subject to VAT then you also save on input VAT.
Or if you export. Reclaim input VAT, sell without VAT.
