VAT

[Djfreema]

Hi there,

My business (when I eventually start it) will not be registered for VAT.

However on the materials I buy I will have to VAT, is there any way of claiming this back even though I will not be registered for VAT.

My thinking is if I dont charge my customers VAT then I shouldn't have to pay it myself.

Any help much appreciated.

Thanks,

Darrell

 

[DuaneJackson]

Nope, you can't claim back the VAT at all if you are not registered. HMCE don't agree with your thinking : )

 

[multilingual]

My thinking is if I dont charge my customers VAT then I shouldn't have to pay it myself.

I like the idea, but I can't see it catching on

Like Duane says, there is not much you can do about it other than register for VAT and then reclaim the tax back. However, you might be financially worse off in the long run by going down that route.

It's complicated but if you buy something for 10 and sell it for 20 then you make a tenner profit. OK, VAT is included in the purchase and you can't get it back, but you still make ten quid clear.

If you register for VAT then you can claim back the £1.50 VAT on the purchase, but you will have to deduct £3.00 from the sale price of £20 and give that back to Gordon Brown.

Your profit then drops to £8.50

You could put your prices up to compensate but then you lose your competetiveness in order to try and make back the £10 profit that you were actually making in the first place.

Hope that makes sense :?

Basically, just work the VAT into your costs and don't dwell on it too much, it's something we all have to pay and being able to claim it back is not always an advantage.

JB