samll home business without VAT???

[gg_dagg]

Hi,
I am running a small business at home and recently imported something from oversea.Because i just started the business, i haven't registered as a company and a VAT number(people suggested me that i do not need register VAT number until turnover over £65,000/year).
I have a question. Because i haven't registered a VAT number and a company, once i sell something out to my buyers, how can i give a receipt to them as they normally request one? Does a hand writting account?I understand they need receipt to claim VAT back, but what can i do to help them?
Sorry the case is a little complicated.
Many thanks and have a nice day


gg_Dagg

 

[finstar]

gg-dagg,

Your case is not complicated at all.

If you are not registered for VAT, you cannot charge VAT, if someone asks you for a VAT receipt, you cannot give them one because you do not charge VAT. They cannot claim VAT back, because you did not charge them VAT in the first place.

I hope this helps.

 

[paulday]

Depending on the image you want to create for your business, you can register for VAT, even if you are below the minimum threshold. It has it's advantages and disadvantages, but your business will be purceived as being bigger than it is, if that is what you want.

 

[SmallBizSoftware]

Any one reccomend a good course/book on how to import. I am baffled by all of the regs. Tried once before and got confused about Carriage-insured-freight etc and how the goods get to my front door and not stuck at customs.

Appreciate any help as I am sure that there is an opportunity linking cheap imports to ebay

 

[Jayne]

Hi,

If you go VAT reg', even though you are below VAT limit, you can claim VAT back on anything you buy for your business that charges you VAT. We did that when we started out and got more back from the VAT people than we paid. (shame it didn't stay like that!)

Best Wishes

Jayne

 

[SuffolkDesigns]

I would also say it depends alot or the type of clients you are getting.

If you sell to business, you can give them an invoice at 0% VAT as you are not VAT registered, or if you are registered you charge them VAT and they claim it back, either way doesn't really make any difference to them.

If you are selling to the public, not being VAT registered allows you to sell at 0% VAT which makes your products / services quite alot cheaper to them. (nice when you are starting out)

Of course, this is also a problem when you have to go VAT reg's and your prices suddenly increase because of it

 

[webit]

Being registered mans that we claim back on hosting, refreshments, PC hardward and R&D costs etc. Makes a big difference.

 

[vigo]

Just a note, if you are not VAT registered you MUST NOT produce invoices with "0% VAT", or any other mention of a rate or charge of VAT. If you are not VAT registered its safest not to mention VAT on the invoice at all.

 

[Eagle]

Care to elaborate on why?...

 

[vigo]

Its the law. There is a rate of VAT that happens to currently be 0%, if you put this on an invoice you are charging VAT at this rate and so must be VAT registered. Putting VAT @ 0% line or similar on your invoice while a non-VAT registered entity is a criminal offence (as is charging, or appearing to charge, the standard rate of VAT while not registered).

Rates of VAT are:
Standard - 17.5%
Reduced - 5%
Zero - 0%
Null - VAT not applicable

 

[Eagle]

Thought as much, thanks

 

[vigo]

No probs. Was sure that afternoon at the VAT office would come in handy one day

 

[Delta12]

Hi,

I do understand this, I don't charge VAT because I am not VAT registered but my suppliers still charge me VAT for the products that I buy to re-sell.

Now somehow I have to then include VAT in my prices but not tell anyone? If I don't then 17.5% profit is paid out on VAT to my suppliers and I am unable to claim it back because I am not VAT registered? Do I understand this correctly? Which then mean that I might just as well close my business as I can not add my profit margin which is less than 17.5% onto my products and end up paying in on products that I have sold because of the VAT that goes to my supplier. Do I make sense? Can someone please help me out on this?

Thanks

gg-dagg,

Your case is not complicated at all.

If you are not registered for VAT, you cannot charge VAT, if someone asks you for a VAT receipt, you cannot give them one because you do not charge VAT. They cannot claim VAT back, because you did not charge them VAT in the first place.

I hope this helps.

 

[saxondale]

Hi,

I do understand this, I don't charge VAT because I am not VAT registered but my suppliers still charge me VAT for the products that I buy to re-sell.

Now somehow I have to then include VAT in my prices but not tell anyone? If I don't then 17.5% profit is paid out on VAT to my suppliers and I am unable to claim it back because I am not VAT registered? Do I understand this correctly? Which then mean that I might just as well close my business as I can not add my profit margin which is less than 17.5% onto my products and end up paying in on products that I have sold because of the VAT that goes to my supplier. Do I make sense? Can someone please help me out on this?

Thanks

thats correct.