VAT FOR BUSINESS EXPLAINED!
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- čas přidán 6. 08. 2024
- Wondering what 'VAT' is all about? In this video Dan runs you through some examples of how VAT works, and how it affects your business.
Topics include:
How does VAT work
What is VAT
What does VAT mean
When to register for VAT
VAT threshold
Is VAT good for new business
When is it a good idea to VAT register
..... and more!
#selfemployed #VAT #limitedcompany #smallbusiness
If you have further questions - please get in touch below.
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Web: www.heelanassociates.co.uk
Call: 02392 240040
Email: info@heelanassociates.co.uk
I'm an online retailer and VAT has crippled my business. I'm unable to add the cost onto my products as what I sell is so competitive. In light of this, I'm handing over around about £1500 every 3 months of my profits to the tax man. When you sell online, hitting the VAT threshold is really easy. In my eyes, when you're selling to consumers then VAT is a tax that inadvertently sabotages your business. The threshold should be based on profits and not turnover. Turnover doesn't come close in reflecting your profits. Basically it's legalized theft...forced taxation.
Hi Dave, yes its super challenging in many businesses, as it really eats into your profit margins (effectively 1/6th of your income disappears depending on what VAT you are recovering).
Firstly has your business exceeded the VAT threshold?
Does your company trade to business to business /business to customers or are you a middleman?
If you are VAT registered have you reclaimed back VAT on your purchases? Rent, materials .....
Is your business importing goods into the UK?
VAT is a charge which you should imbed into your cost, especially if you're VAT registered. You're collecting the money on behalf of HMRC, the money isn't technically yours. The people buying your goods are the ones paying VAT. Most people can't grasp this concept.
If you're making profits and having to pay off your tax bill it sounds like you're breaking even and you won't have to pay corporation taxes.
That's why it's a good idea to use an accountant who can find ways to reduce your tax burden.
@@keshabkuikel6636 yes I hit the threshold a few years back.
I claim all VAT from my purchases.
I realize that I need to collect the extra from my customers in the shape of VAT - however, hiking the prices up in order to do this just reduces my sales. Therefore, I am basically footing the bill.
I'm at the point now where I am looking into moving to a country in order to stop this.
Totally agree.
CORRECT. I'm finding this out as I'm ordering products to Europe. You know what isn't VAT taxed? G0ld to C3ntra,l banks.
what a perfect way to explain VAT in general and simple terms, thank you very much
Glad it was helpful!
Thanks for being so clear! It’s damn refreshing 😂
Thanks Benny glad you understood it!
Watched a few videos on this and it didnt click, your explanation especially the bit where you give examples on selling price, cost, profit and tax really did it for me. Thanks!
Glad it helped!
Thank you for this video. Much easier to take in than reading and re-reading.
Glad you enjoyed! Its one of the reasons we do podcast, blog and video - something for everyone!
Great vid, clearly explained, thank you!!!
Glad it was helpful!
Great video. Really appreciate the knowledge!
Thanks Steve, glad you enjoyed.
I wish they’d told me all this at school. Thank you!
Yes we think much of this should be taught in schools!
Thanks for this. Sharp, Concise, Clarified !
Glad you found it useful!
PERFECT VIDEO! Highly appreciated!
x
Glad it helped!
That was a very useful and informational video. Thank you!!
Glad you enjoyed!
I wish the benefits were explained with some numbers like the example. Because it all sounds unbeneficial after hitting £85k i.e. the work around of increasing the pricing to counteract it, whilst making it more expensive for the consumer.
Really great explanation! Thanks
Yes often if we are talking about working with/ selling to the public it can fell like it’s just not great from a VAT point of view. Maybe in a future ‘re do’ of the video we will add some more numbers to that situation.
Brilliantly broken down. Thank you.
Glad it was helpful!
Thank you useful information, left me personally a bit low given the extra work it appears i have to but very useful
Glad it was helpful!
Thank you, this was such a helpful video 😊
Glad it helped!
great clear video, thank you!
Glad you enjoyed!
Well explained ! Thank you!
Glad it was helpful!
Very helpful, thanks.
Glad you found it useful!
Very nice video.
Thank you
Glad it helped!
Great video, thank you.
Glad you liked it!
really helpful thank you
Glad it helped :- )
Very helpful thankyou
Glad it helped!
Great video thank you. I am a pretty small online retailer, I'm not a limited company and not VAT registered. It's part time and I am self employed in other work and so it all comes under one umbrella when doing my self assessment. Every supplier I purchase stock from, charges me VAT. With what starts off as a general 45-50% margin on a product, ends up not very good once I pay the VAT added onto their invoice. My business is pretty slow in progress because of this. Something needs to shift to make this work better. I am now starting to import products from China and so moving forward to try and grow, should I set up a limited company and would registering for VAT work for me now bearing in mind the extra accounting I would need to do with this? Thank you
It’s very hard to answer that without a lot more detail sadly.
If your selling to consumer it’s unlikely registering for vat will help with your margins. The limited company question goes back to this vid czcams.com/video/QBXEq931h98/video.html
If you would like some advice specific to your situation you can always get in touch with our team who can arrange a 1-2-1 with one of our accountants.
Hi, really great video! How does it work with regards to VAT if you're VAT registered and invoicing a customer in another country (Germany for example)
That’s sadly too long a question to answer here! It depends on things like whether it’s a business or public customer, the type of service or goods and what’s known as ‘place of supply rules’. (Example: www.gov.uk/guidance/vat-place-of-supply-of-services-notice-741a )
Amazing
Glad you enjoyed
Hey, thanks for the simple explanation - great video! If I run my CZcams channel through a limited company ie I don't actually sell any products or services - could I voluntarily register for VAT and claim VAT back on expenses incurred for running the channel such as a camera? Secondly, similar question but for a limited company and renting a house. No actual products sold again but i would buy things such as furniture that I could claim VAT back on so would it be worth registering there as well? Really appreciate your help!
Hey sorry we missed this one.
It could be possible to do this for a trading business in UK, but we are unable to give you an opinion here on whether you should / its a good idea.
UK domestic rent is exempt so you wouldn't normally be able to register for VAT just for this, if you were able to for some reason (like you had a business that did rentals and something else with taxable supplies), any VAT on expenses relating to that rental would not be reclaimable, and you'd put any VAT on mixed overheads at risk of not being able to reclaim as well.
Hope that helps
To clarify, if you purchase goods from another business, you will also receive from them a vat receipt, so that when you charge your 20% to your customer, you can retain the vat amount that your supplier paid the tax man, and then pay the tax man the difference. The reason why this system is used as opposed to a standard sales tax rate as is implemented in the US, for example, is that customers will pay more for products with longer manufacturing processes. For whatever reason that is important, I dont know, but it probably has something to do with more governmental services being used the more times a product changes hands in its manufacturing process. In the USA, you pay for these govt processes whether you use them or not.
Thanks Matt. Some of this is true some isn’t but would take too long in the comment to list to run through but should note
Not everyone in Uk is vat regd
If they are the rate isn’t always 20%
Thank you for making this a bit more clear. So I'm thinking of opening a website to sell prints from my photography. I don't work with clients...I just want to sell physical prints of my work. So from what I understand I don't need to register for VAT as of yet? However, does this also apply to non physical items such as licensing my photos (until I reach the threshold)? Regardless of registered tax or not I assume I'll need to register as self-employed even though I'm just starting up? Thank you :)
Generally if we are speaking UK, you won’t have to vat register until you reach 85£k, so need need from day 1.
Hi there, do you have a video on the change in VAT rules from 2021? In particular, regarding overseas sellers that sell within the UK
It's on the list that one. The reason we haven't done it yet is there is a big change 1st July we are waiting on.
The short of the problem is UK selling to EU consumers is a nightmare...
I went over 85k sale do needs to regoster for vat now. Good video good explanation
Yes, so if you exceeded the 'threshold' (limit) in September, you need to VAT register asap for the 1st of November. Congrats on making it past the £85k!
@@HeelanAssociates not sure if thats a good think. Need to increase prices slightly to compensate 20vat well lets hope it will still going well
@@MrTurd-mc4ee yes pricing is the key issue! Depending on what you do it doesn't always have to be a straight 20% increase, as you will be recovering some VAT on your purchases, to keep your profits.
Also, if your customers are VAT registered, it makes no difference to them as they can recover it.
@@HeelanAssociates hey there! what do you mean customers who are VAT registered can recover the VAT? I'm new to the subject and don't really understand what you mean by that. Thank you!
Clear breakdown - thanks! I have a question though. Currently, we only sell products rated at 0% VAT. Does that mean it is definitely worth being VAT registered because we could then effectively reclaim all VAT we have paid (for our ingredients, fuel etc) and we would then not have to pay any to the Government?
Without knowing your exact circumstances we couldn't say, but generally in this scenario this is a solid option that many businesses do.
Love the channel. Am I missing something with the application of VAT, as in your example you appear to be applying VAT on top of VAT?
In an imaginary world with no VAT, as per your chair scenario the cost of the wood is £50 and as the manufacturer of the chair the cost of your labour appears to be £40 - resulting in a zero-tax cost for the chair of £90. Hence, the ‘profit’ element of any sale of the chair is essentially cost of your labour - i.e. £40.
If the supplier of the wood is registered for VAT and you as the manufacturer are not registered for VAT, the effect would be a cost for the wood increasing to £60 (£50 material cost plus £10 assuming 20% VAT), an unchanged cost of labour seemingly at £40 resulting in a cost for the chair of £100 and an unchanged ‘profit’ element of any sale remaining at £40. However, while the final net cost of this chair remains at £90 in respect of the materials and labour, if the sale cost is £100 it appears that that buyer is in fact paying a ‘hidden’ VAT cost of £10.
If the supplier of the wood and you as the manufacturer are both registered for VAT, the cost for the wood and your labour should remain unchanged - i.e. £50 plus £40. However, since the supplier of the wood and you as the manufacturer are both charging VAT, wouldn’t the total cost of the materials and labour remain as £90 with a total gross amount of £108 charged - i.e. 20% of £90? In this scenario, the £108 charged for the chair would maintain the £40 ‘profit’ for the manufacturer, it would cover the £50 cost for the wood, cover the £10 VAT to the supplier of the wood and would leave £8 to pay the tax man.
On this basis, I am unclear why your second example contemplates a total cost for the chair of £100 plus 20% VAT - here you are seemingly increasing the cost of the manufacturers labour / ‘profit’ by £10 and change 20% VAT on this additional amount of labour / ‘profit’.
Your rationale does not appear consistent with your final example, where to compete on price the manufacturer sells the chair for £100; effectively reducing their labour / ‘profit’ by 16.675% (from £40 to £33.33).
Considering the apparent overarching principal of VAT, is there anything that would prevent the manufacturer from having multiple companies (some registered for VAT and some not) selling the same product? As it would appear to me that the most efficient strategy would be to have multiple companies below the VAT threshold selling the same chairs at £100 to domestic / residential customers, multiple companies below the VAT threshold selling the same chairs at £120 to domestic / residential customers and a VAT registered company selling the same to chairs to other VAT registered companies at £120.
Finally, if it is possible to obtain a VAT refund on unsold purchases, how is this viewed over time? For example, if a company purchases all if their materials / stock in their first year of trading without making a single sale; how would this be carried forward into the next financial year assuming the company sells all of the originally purchased materials / stock and replenishes it all in their second year of trading?
Hi Andrew, i'm sorry i've read your comment a few times but can't understand your calcs/the issue with ours, could you expand?
Great video! Question: do I NOT need to pay any VAT in the European Union as long as I don't meet each country's individual threshold? I would only have to pay based on all purchases AFTER I surpass the threshold, correct? Thank you!
Hi Carolina. EU VAT is all about to change on 1st Jan...... probably for the worse.
When you say pay VAT, do you mean on things you buy, or charge on what you supply? Are we talking goods or services, and is this business to business or business to customer?
Heelan Associates hey there! I will be selling merch from Brazil to Europe, though nothing crazy. These are temporary custom merch sales for the release of a project. Do I need to charge VAT to my online customers if I’m under the threshold? Can I not worry about that, or is it possible the government might ever decide to charge over what I already profited before reaching the threshold?
Thank you so much
Hope it was useful Joanne!
Hey, great video! I'm a little stuck on one topic though and I haven't been able to find a clear explaination elsewhere. I am a very very small business (£1000 in expenses so far), should I register for VAT so I can begin claiming back these expenses or does that not work since the VAT I will be claiming will heavily outweigh any VAT I'm paying from adding on the 20% to my good.
Great question. The answer lies in another question - who are your customers? Is it the public, or businesses? If business, are they reasonable size i.e likely to be VAT registered?
@@HeelanAssociates Thanks for the response, as for my customers, I'm pretty sure most if not all of them will just be ordinary members of the public, however, it may be worthwhile to mention that although VAT charges 20% on my sales I'm happy to eat that charge for a while since I believe I will actually benefit more from the 20% gained from claiming back VAT from purchases, I'm just unsure if I'm getting something wrong about the system and how it works though since I feel like what I'm doing is almost a loophole. Thanks.
@@ViryzonPvP So what did you end up doing? I'm very interested in knowing the answer to this.
Your videos are really helpful! just small question, Can a UK limited company have a "Principal Place of Business" Outside the UK?
It’s more a practical issue depending on the tax in question. Operating abroad through a UK co can get pretty complex pretty quick from a practical tax point of view.
@@HeelanAssociates Thank you so much for taking the time, your answers really help me... I agree it's pretty complicated when it comes to taxes, but, I can use a Principal place of business address that is outside of the UK for a limited company in the UK right?
Hi, when you're VAT registered, should you include input VAT when pricing your goods? For example, if I buy an item from a wholesaler for £30 including VAT (£25 + 20% VAT)) should I add my mark-up on top of the £25 because the VAT I pay I will get back? Currently I am not VAT registered so when I price my goods I add my mark-up on top of the price I paid for the product including the input VAT as I cannot claim this back. Also, when paying my vat bill, would I pay 20% on the profit on each transaction or would the VAT be on the total revenue? For example if I sold a product for £50 and earnt £20, would I pay VAT as 20% of £50 (the total cost) or on the £20 (the profit) Thank you
If the VAT is recoverable by you, then yes when working out price you'd normally mark up on the 'net' (£25 in your example).
VAT would be payable on total venue received (in most simple cases). Some trades can use a margin scheme that applies VAT only to profit but its usually reserved for trades like second hand motors.
Hi Great video. I have receipts for materials from a supplier who is not registered for VAT. Do I put them in box 7 on the vat return eg are they zero rated or exempt. To me doing so would unbalance the list of figures on the return. Many Thanks
Yes you should include them. What should be left out really is only things that are ‘outside the scope of vat’, examples given at 3.8 here www.gov.uk/guidance/how-to-fill-in-and-submit-your-vat-return-vat-notice-70012#explanation-of-some-common-vat-terms
I have a question I live in Australia and I've been selling stuff through shopify and a dropshipping app which charge me vat on particular products. My question is if I apply for a vat ID do I have to pay vat if I'm making less than 85 a year?
If you apply for UK vat under general rules you would need to consider whether to charge UK VAT your sales. This may make it not worth any reclaim - it's worth doing the maths.
It's too wide a question for the comments, but basically if you have a UK VAT reg, you'd be expected to submit regular returns and you would have to consider VAT on your sales, regardless of being under £85k.
It's possible (and in some cases preferable) to register early for UK VAT so being under £85k and VAT registered is fairly common.
Do you choose whether or not to be vat registered in the UK. is there a threshold where you must be vat registered?
Hopefully this helps SHOULD I BE VAT REGISTERED?
czcams.com/video/Y8qWDts2bA8/video.html
We are based in the UK, we consult and project manage the installation of electrical hardware. We are about to take on a client outside in the Middle East. They will buy our services and we will supply and install electrical hardware purchased in the UK (so we will be charged VAT), exported for the install. How does VAT apply in this scenario? Many thanks.
Hi there,
We’d have a few questions on this one before we could answer, but sadly it’s not something for professional restriction reasons we could answer in a comment here.
If you’d like some direct advice on this, don’t hesitate to get in touch with our team info@heelanassociates.co.uk
Hi,we are involved in equestrian(riding school lessons and livery), it’s seems a complicated scenario, any idea where I can source some clear information/advice on this issue
Hi Tony, complicated in what sense? Any particular info you are looking for?
Hi. I am currently nearing the VAT threshold, I know for sure that if I'll stay operational, I would reach it before the 12 month period ends. But I'm quite new to all this and I think I am not yet ready to deal with VAT as I'm busy enough already as it is. Can I close my business while still below the threshold until the first 12 month period ends and resume it after to avoid registering?
Presuming you’d be carrying on the business your vat threshold is still a £85,000 ‘rolling’ 12 months. . So if you plan to not trade for months at a time to make sure that’s the case it’s possible. I’d argue you are better of smashing it and growing your business but . . 😃
Need your opinion, am self employed kitchen fitter and a contractor for kitchen retail company where cis is deducted at payment, though not VAT registered but the company deducts cis and vat before payment, what are your thoughts
If you aren’t vat registered there should be no vat on the invoice to deduct. Sounds like a chat with the contractor to resolve!
Hello, was wondering if you could help me please. I am near the threshold to become VAT registered. My business is B2C and it would be very difficult to increase cost of goods. So I would have to lower the cost and pay the 20% VAT for the sale. If I am paying more VAT for my sales to HMRC than I can claim back for my purchases will my business be worse off? I’m confused as to if you pay more VAT than you can claim back on your purchases do they owe you it back or do you lose out.
It depends on costs but generally you end up worse off per item.
So if the item was £100, now only £83.33 of it is actually yours. But if the cost of the item was £60 (including VAT), you can 'get back' the £10 VAT (in general terms), so you are only about £6 worse off, presuming you couldn't increase cost.
If you think, worse case, if you did nothing and had no VAT to reclaim, if you took your sales and divided by 6, you'd be that much worse off.
Hi, if you voluntary register for VAT, and you are bellow 85k. From what date should you say you want to be registered? Assuming you want to register back 6 months ago. Can you reclaim VAT back from 6 months ago if you had some clients that charged you VAT on their services? Also when you Invoiced your clients 6 months ago you where not VAT registered, so can you take all that VAT money back, what do you need to do with your old Invoices that didn't had VAT on them cuz you where not registered 6 months ago?
Another question: Assuming you register 1 week ahead, your new invoices are containing VAT, your clients are also VAT registered, you do VAT in and VAT out and lets say you need to take some money back from VAT, this extra VAT money are accounted as profit when you do your self assessment at the end of year? Thanks
Hi Edmond, might be too much to answer in a comment, but in general:
You choose the date.
You can reclaim VAT (in general, some stuff blocked) on goods you bought and still have on hand from up to 4 years ago.
As above for services, but 6 months.
These limits are from the date you register.
You registering now does not affect your previous invoices.
Hope that helps.
Hi Dan
So as a limited online company I don’t have to register as VAT since it’s a start up and we will not be hitting the threshold. However we buy our products from china (beauty products eye lashes to be exact at the moment) and I pay VAT on the products we buy so would it be best for us to be VAT registered so we can claim this vat back? Thank you btw
Hi,
It's the usual issue in this type of instance. You could register voluntarily as your under the threshold, and likely reclaim the input VAT, but depending on where you sell your products, you'd have to charge VAT on your sales, which will eat your profit margins :- )
As a result it's often not worth it until your have to, but not knowing your full situation, don't count this as advice ;- )
If I as an importer, bring in a product which I have paid VAT on after going through customs. For example a product that cost £10 and I have paid a vat of £2 on this products. When I re sell the product for let says £15 plus VAT which works out as £3 VAT being charged to my customers. My question is if I had 100 units it means I have given out £300 worth of vat which my customers will claim back from and I will only get £200 back from the government ?
I might not be understanding your situation completely here but in that example it doesn’t matter what your customer can reclaim, your position would be that you would hand over £300 less any recoverable vat you incurred on import.
As an individual with a registered entity in the UK and VAT registration at 20%, if we buy goods from a UK retailer, will we are required to pay VAT? If so, how much can we claim back?
Sorry this one we can't really answer in a comment, there are too many nuances to the situation, however:
In general though, if you are a UK vat registered entity being charged uk VAT, and are usually allowed to recover VAT, its likely you could claim this amount back in your return. If in doubt, seek support.
Hi,
Can you please show us a filled digital spreadsheet as an example.
Kind Regards
How do you mean? Can you explore some more?
hi Dan, would I pay VAT on CZcams content? I have a product business that is just under the threshold so if I start making money digitally will I start paying VAT?
Hi Cat it depends on the income. *Generally* adsense/google revenue from the channel ends up being outside the scope of UK VAT, but if you have other sources that might not be the case.
Nice
Glad you enjoyed
Very informative video and clear example. Thank you.
There is still something I don't quite understand:
So there is a presupposition that my client is ok paying £120. Does it make a difference for him if I am registered for VAT at that point? If I wouldn't. Would this £120 be more expensive for him?
Hi Arthur, sorry I don’t understand your question, could you explain some more?
@@HeelanAssociates I do reckon, Arthur`s question related to Profit
Margin & Mark up.
If you pay VAT using the margin scheme as its 2nd hand goods. Do you charge VAT on the goods you sell (as you are VAT registered) or just pay the VAT as its a margin scheme?
If your in margin scheme it’s special rules, you usually pay vat on the margin you make. www.gov.uk/guidance/the-margin-and-global-accounting-scheme-vat-notice-718
Hi, thanks for the video, nicely described and very apt for me as I'm a joinery manufacturer.
I'm looking at becoming vat registered, but under threshold as work alone. Most joinery companies are vat registered therefore I shouldn't lose out on trade. I can back claim 4 years of vat on goods still used in business which should equate to £20k-£30k in VAT paid on machinery van tools etc. This is a huge benefit for me. I can then charge vat on my end price and claim back vat on materials from which I will keep the remainder. As I see it i will therefore benefit hugely from this, am I correct? When I speak to people who are vat registered they say they do not benefit financially? Thank you in advance as this has been puzzling me for a while.
Certainly sounds like a standard situation where VAT would be beneficial, but would need some further detail to be sure (probably outside scope of a comment here).
We just did this one which may explain why people say it doesn't work out: czcams.com/video/Y8qWDts2bA8/video.html
if an AMZ FBA seller is selling exclusively in the US - thru a UK LTD - do they need to VAT register?
all goods are stocked in the US warehouses. TIA!
That unfortunately it’s too difficult to answer in a comment here, as there are lots of questions around the exact situation that would make a difference.
If you wanted some advice specific to your situation you can get in touch with the team who could run you through how we might help get you that advice.
I am in Canada and my clients in EU especially France . I am starting an online business ( services) and now I've learned that I have to register for VAT. Where I live, we don't have to register for VAT if we generate less than 30.000$ per year ( which is my case). Don't know what to do and who to ask ? Should I register in Canada or France ?
I see you mention you’ve learned you need to reg. I’d check with either a local accountant with international vat experience or if France is particularly your concern, the French tax authority.
Should I charge VAT on my Labour? Should I charge VAT on materials that I already pay VAT? I'm a tad confused. I'm a sole trader selling Leather Goods so I'm still new to this.
If you aren’t vat registered no vat.
If you are *normally* yes you charge vat on labour and materials.
Can I claim vat back on a cash purchase,? I paid cash and got an invoice to my business , it was for materials for my business
If you are VAT registered and its normally VAT you could recover under normal VAT 'rules', then the fact you paid cash is not a problem.
Hi,
As a landscaping company we charge VAT on our bill. If we buy a brick for £1 +vat, should we charge the customer £1.2 + vat or charge him £1 + vat as we are claiming vat back.
Thank you
If you don’t want to make a profit on the brick it’s just the £1+vat.
@@HeelanAssociates is it allowed to charge VAT on top of the vat that you pay?
Hi. I want to register as a sole trader (as a business that provides marketing support on an ad hoc basis in addition to full time work). I know that my take home figures will not exceed the £85k as set by HMRC, but am unsure whether I should be VAT registered. Is the main advantage to claim VAT back on items relating to the business? Or am I getting confused? Please help!
Hi Leia,
If terms of registering voluntarily, yes the main benefit would be recovering VAT you incur (say VAT on a new latop, accounting bills etc). The issue is (paperwork/reporting aside!) is that you have to charge VAT on your sales.
If your customers/clients are VAT registered businesses themselves, it's likely they won't care about that extra VAT on your bills, but if they aren't, and if you want to keep the same amount of money for you, your bills likely got 20% more expensive.
As a result, broad-brush, you tend to see if businesses working with the public, they don't register for VAT until they have to, and those working with slightly larger businesses considering VAT registering anyway near start.
We've worked/work with many marketing firms as clients and it's about 50/50 in terms of cases we see - very dependant on your exact situation.
Hi there, I'm from India and want to start selling online stuff in usa and other countries like dropshipping but i have limited budget so usa company formation is bit costly so I'm planing to register company in uk but Do i need to pay vat from day 1 or it is not necessary until i reach 85k pounds revenue. your answer will highly appreciated. thank you so much for this video.
Hi, thanks for taking the time to comment.
Your situation is an odd one, and presents many issues from a VAT and corporate tax perspective. As such, it's not something we can answer here in a short comment.
Sorry that's not more helpful.
Can you assist me with the factors affecting the administration and compliance of VAT by supermarkets please🙏
Thats quite a wide question! Can you narrow it down?
@@HeelanAssociates how does vat affects supermarkets
Hii.. please upload a video on withholding taxes
Any particular? They are pretty niche taxes in the UK.
If someone is charging me VAT, is there a way I can be sure they are VAT registered and not just having me over?
Sure www.gov.uk/check-uk-vat-number
we import goods from china to sell in UK/EU/ROW.. we just started and not VAT registered .. will I be charging vat when selling to any country ? thanks
If you aren't VAT registered no you won't charge UK VAT. If you sell into EU you *may*/likely have a import VAT issue in that country (or your customer will!). Bit hard to explain in a comment this one sadly.
@@HeelanAssociates No I understand .. thanks you very much .. what about selling to US/Canada .. I dont have to charge any tax for them either right ? thanks
Could you please tell me if i sell kids educational toys in uk do I have to pay VAT on them?
It’s depends whether you are VAT registered in general. Presuming you are it depends what you are supplying, but by basic rules ‘toys’ would be standard rated (20%) vat. There is at least one badly written selfie indexed online that is misleading.
If I'm below the threshold can I still claim back vat after registering?
Yes once you have registered the usual rules apply, if you could usually recover vat you would be able to (as you will still have to charge it).
We applied for VAT, after 30days we got a questionnaire, 3 days ago we filled the questionnaire, now the question is when will we get the VAT Number,
Kindly help
HMRC have been VERY slow with VAT apps. Middle of last year clients were waiting 5 months! But has been around 4 weeks currrently.
Hi I’m a limited company , selling used and new goods at auction houses, may I know how should I submit my vat returns ? Thanks
This one is far too wide to answer in a single comment unfortunately! Is there a particular element of this you are struggling with? If it’s the whole process would advise getting some pro help
Heelan Associates thanks for your reply. May I know how can I contact you for a consultation?
Thanks
But how much the taxes in UK ? For small business!! I live in Italy and i have a small business i make 5k in year ! But here in Italy they kill you with taxes every tree months you should pay 1 k euro for vat taxes and the end of the year you should pay 15% of your yearly profit ..i pay 6 k every year and i make just 5k 😭 , i don't want close my handmade shop but i pay more than i have !! I want change the country and move to UK !! any advice please ...🥺🥺😱
The UK still has VAT although we have a high threshold (£85k a year) before you have to register. Our tax rates are more than 15%.
The benefit of the UK as I understand it chatting to owners from other countries is how easy it is admin wise to set up!
So let me get this straight.
You make £100 selling the product that had a total of £60 material cost. Ie. £40 profit.
But when youre VAT registered, and you choose to do the second method, why does it not count as the profit being £93.33 (Instead of the £83.33) if you are only paying £6.67 to the tax man.
Meaning the actual profit is going to be £93.33 - £50.00 = £43.33. Is there something that I am missing out? What happens to that £10 VAT that gets returned?
Think of the cash:
VAT to handover £16.66, less £10 = £6.67
Income after VAT £83.33, less cost after vat £50 = £33.33
Looking at your example you are adding the VAT in step 1 AND taking it off step 2.
Hi i own a hot food takeaway with a turn over of £250000 a year and im on a 20% vat scheme and when i work this out after all the hard work that i put in the business i only earn a minimum wage for my self as i have to pay £50000 to vat.
Please do you have any advice for me or could you consult me.
Thank you
It's difficult in the world where you serve the public when dealing with VAT, totally understand the frustration.
It's a very common challenge of being self employed.
VAT wise, there isn't many options; but have you looked further than VAT?
Maybe this vid could help generate some ideas: czcams.com/video/kWFHKImX6dg/video.html
Oh man.. that was a load of help thanks.. I'm starting to sell on Amazon as a sole trader and was wondering if I should be VAT registered from the outset.. it's a minefield! (I'm only selling animal nutritional supplements but then apparently those are zero rated VAT.. so I'm really confused by it all.. you've helped.. a little bit!)
Amazon selling can be a minefield generally, but right now its more difficult due to Brexit if you sell into EU!
Hi.
Do I need to handover vat if I am paying foreign supplier
If they are charging you foreign vat then yes, although depending on the situation it might be if you told them you were a business they *might* not charge you it (bit longwinded to go into in a comment in terms of when they might/might not charge you VAT).
Hi, I have a queation in regards to Vat on delivered goods. If I sold an item for 100 free delivery but the postage cost were £10 am I paying paying to the goverment £16.67 on the £100 sale or do I pay £15 based on the gross net of £90?
Hope this makes sense Thanks
Generally its one supply, so £100 would be £16.67. Section 2.2 here covers this www.gov.uk/guidance/vat-on-postage-delivery-and-direct-marketing-notice-70024
You have more pens than me in my own office
Oh there are plenty more where that came from :- ) You get a discount on bulk....
Is the VAT return deadline by the 7th or on the 7th?
Effectively 23:59 on 7th
@@HeelanAssociates thanks!
What is vat return?
It’s the return you have to do regularly if vat registered to tell hmrc what you need to pay them (or they to pay you).
Hello is that 85k + turnover or 85k gross profit
Turnover.
Thank you!
Only register if you pass the threshold if you deal with the public
** in most cases :)
my taxed income pays for taxed good and services?
Sounds sadly right 😃
Hi everyone.
Great video.
Could somone help me out here?
Im trying to workout this if somone could help.
I charge my customer £31000 including the VAT (I am VAT registered)
The goods I purchase from suppliers cost me £24863.25 including VAT (all my suppliers charge VAT)
How much is the exact VAT figure that I pay the VAT man after all the offsets etc.
Very confusing!! It’s not £6200 I pay the VAT man. It’s that offsetting stuff???
£31,000 including VAT is £5166.67 in VAT, £25,833.33 of 'your' money.
To find this, divide £31,000 by 6.
£24,863.25 inc VAT is £4143.87 VAT, £20719.38 of actual cost.
So VAT to pay (presuming VAT is fully recoverable on your supplier cost) is £5166.67-4143.87 = £1022.80.
Your actual profit on the job is 25,833.33-20,719.38 = £5133.95
Why not just AT?
I guess there arguably isn’t much value in value added tax 😂
im just here for my math assignment
Unsure if this helped that one 🤪
Manic!
Ofc 😃
Vat is this?
Vat is your question? :- )
The only one thing you forgot to say is that by becoming VAT registered, you gain trust and some sort of credibility!
This is also true.
I disagree, why would there be credibility if you're VAT registered? If you're a start up business you shouldn't register for VAT due to not having any benefits.
Think of it like this, you're able to sell goods 20% cheaper than the market. Once you're VAT registered you will have to increase the cost of your product.
This is important when you're starting up a new business.
Vat tax = 20% of your sale price - 20% of your supply cost.
Well the maths is a little different, as it’s +20% of your next price. So it’s 1/6 of your actual sales price Inc tax
Thomas Tuchel a business expert
Ha you are the second person to say that :- ) Can't see it personally but it could be worse!
Hi Dan,
Do overseas sales (mostly to USA) count towards VAT registration threshold (£85,000)?
Ah tough one depending what you are doing!
Often the answer is no... but not always. Sorry bit cryptic but difficult to answer here.
Have a look here for services: www.gov.uk/guidance/vat-place-of-supply-of-services-notice-741a