Registering for VAT?

[suna]

Hi,
I setup a new company in United Kingdom England which will be online retail shop with products directly from manufacturer brands.
Issue I have, is that supplier says I have to be VAT registered before they can do business with me.
As a new startup, how do I get required information for HRMC that I am intended to trade and charge VAT if all I have so far is website domain name.

I am only building website if VAT registration would be successful and not before so don't waste my time.

Any suggestions, on how I can get VAT application successful to be able actually start my business trading.

Thank you for any replies.

 

[Customs Geek]

Can you let us know where you/your business is based.? This is important to understand before anyone can give you any advice on the need to register for VAT.

 

[suna]

United Kingdom.

 

[macScot]

You should be able to voluntarily register for VAT.

Start here:

How VAT works

How VAT works, what VAT is charged on, VAT thresholds and VAT schemes.

www.gov.uk

Register for VAT

How to register for VAT, change your details, cancel your registration, register for VAT in EU countries.

www.gov.uk

It would make sense to register if you are going to be charged VAT on goods so that you can claim it back. You will also then need to charge VAT to your customers.

I would recommend using a cash scheme for cash flow purposes.

 

[DoolallyTap]

I do not understand your suppliers requiring you to be VAT registered.
They supply goods and charge you VAT, it should not matter to them if you are registered or not.
Why not just ask them why?
It may be that if you are not registered you are possibly to small a customer for them.

 

[DoolallyTap]

If you are not registered for VAT you cannot claim VAT on your invoices to your customers. You will pay your supplier VAT
You should invoice your customer a price including VAT. You need to make your price possibly higher because you cannot claim your purchase VAT back until you are registered.

 

[MyAccountantOnline]

Hi,
I setup a new company in United Kingdom England which will be online retail shop with products directly from manufacturer brands.
Issue I have, is that supplier says I have to be VAT registered before they can do business with me.
As a new startup, how do I get required information for HRMC that I am intended to trade and charge VAT if all I have so far is website domain name.

I am only building website if VAT registration would be successful and not before so don't waste my time.

Any suggestions, on how I can get VAT application successful to be able actually start my business trading.

Thank you for any replies.

HMRC need to be sure it's a genuine business which will be trading before they issue a VAT number.

The first thing I'd do is ensure the company has a bank account - in my experience HMRC will nearly always question an application without a bank account.

If HMRC dont accept the application for voluntary regsitration they will want evidence that your company is in business, typically this may include providing invoices for company business expenses, copies of contracts for buying stock, copies of business contracts, copies of applications for finance/funding from banks, accountants and solicitors letters etc.

 

[DontAsk]

If you are not registered for VAT you cannot claim VAT on your invoices to your customers. You will pay your supplier VAT

You don't claim VAT from customers, you charge them VAT, but only if you are VAT registered.

You should invoice your customer a price including VAT.

By all means charge a higher price but if you are not VAT registered you MUST NOT mention VAT on your invoices at all. You cannot charge, or quote, prices "including VAT".

You need to make your price possibly higher because you cannot claim your purchase VAT back until you are registered.

If the goods have been sold, you cannot claim the input VAT for them. You can only claim input VAT at registration for goods that have been purchased in the past 4 years and are still held in stock.

 

[suna]

Thank you all for your input. I do understand how VAT works but issue I have is to actually get registered for VAT.

Only option I see here is to have some sort of contract between manufacturers and my business sort of pre-contract which states conditions such as VAT and other things.

The fact that I have to proof to HRMC that I am intended to trade they need to have some kind paperwork.

I will try to register again and see what happens.

 

[suna]

HMRC need to be sure it's a genuine business which will be trading before they issue a VAT number.

The first thing I'd do is ensure the company has a bank account - in my experience HMRC will nearly always question an application without a bank account.

If HMRC dont accept the application for voluntary regsitration they will want evidence that your company is in business, typically this may include providing invoices for company business expenses, copies of contracts for buying stock, copies of business contracts, copies of applications for finance/funding from banks, accountants and solicitors letters etc.