Vat and reselling query

[dig-dug-dan]

5 hours ago, waterbuoy said:

I still work on the box of receipts principle and process my accounts using an excel spreadsheet.  This has a 'front end' page from '123 sheets' which deals with the digital side of things re submissions etc.

 

During the three VAT investigations that I have had they took great interest in the physical versions of my invoices - less so wrt to the electronic ones as they are harder for them to sort through.

 

By way of context I have about 700 transactions a quarter to process so not too bad.

Best way to do the accounts ,is a spreadsheet. These programmes are well and good, until there is a software glitch, or you need to delete an invoice!

[Steve Bullman]

47 minutes ago, dig-dug-dan said:

Best way to do the accounts ,is a spreadsheet. These programmes are well and good, until there is a software glitch, or you need to delete an invoice!

What software do you use? Have no problems with deleting invoices with quickbooks. And it automatically works out any vat changes, even if the vat was paid/claimed in the previous quarter 

[GarethM]

Don't think I've ever had any problems with sage, not Vat registered but don't think it's ever had any problems.

 

Deleting invoices is pretty simple, obviously it's better to reuse an invoice number than have a gap.

Edited September 15, 2022 by GarethM

[Vedhoggar]

20 hours ago, Justme said:

Er not sure thats how it works.

 

5% of the fuel & 20% just on the delivery.

 

Not 25% on all of it.

 

For just firewood sellers that do no other work.

You buy at 20% & sell at 5% then unless you have quadrupled the cost of the wood your the same cost as non vat registered. Plus you get to claim all the other bits so could actually be cheaper than non vat registered.

 

If vat registered

Buy a lorry load for £2200 plus 20% total £2640. but you claim back the 20% so still only cost £2200.

Lets assume that makes 40 IBC,s which costs £55 for the wood & you sell at £120 + vat = £126.

You make £65.

You never in effect paid the 20% & pass on the 5% (£6) the customer paid.

 

If not vat registered  each ibc costs you £66 for the wood.

To make the same £65 your selling at £131

 

Then after you get the vat back on tools & fuel your even better off being registered.

 

For firewood only you can be cheaper if registered & it will open up more trade sales.

Ref VAT Notice 700/24 which covers how to apply VAT to delivery services ... if delivery free or cost built in then VAT would be 5% on firewood, if a surcharge for say delivery outside local area or there are different delivery charges base on radius from base then the additional charge for that delivery would be 5% in the case of firewood. If delivery is treated as a supply separate to that of the goods or you deliver someone else's firewood then standard VAT charge 20%. 

 

Those not VAT registered can treat VAT as a taxable loss.

 

 

 

 

 

 

Edited September 16, 2022 by Vedhoggar

[GarethM]

Whilst not wanting to chuck a grenade into the debate, is it really worth going vat registered.

 

Obviously we don't know you're turnover but have you looked at the difference it would make to your current turnover?.

 

It the increase is just a couple of k, it's not worth the worry, paperwork and stress. Unless you're going to drastically ramp?.

[Woodworks]

We do logs on a small scale (300-350 cube per year) 

 

We went VAT reg which was great while setting up and buying kit. Now it saves us nothing and cost extra in accountancy. 

[john87]

On 15/09/2022 at 09:21, Seanoc said:

Hey just a quick one

 

Been buying logs and coal at 20% vat as a reseller 

 

Not charged vat onwards as not registered

 

My question is.. 

I am looking at becoming vat registered as I can claim the 20% vat back and charge 5% onwards to customers burning domestic. Then I can submit a vat claim and will be owed money bsck by hmrc is that correct? 

 

Thanks

Sounds right to me.. I was VAt registered many years ago. People say how complicated it is, but it was dead simple, Made life VERY easy as i did not have to keep "ordinary" books then. I bought one of them VAT account books that you would get in Smiths. Now, say first day trading....

 

You had TWO sections. One was your "output tax" so the tax on what you did, so an entry might be "16/09/2022 nationwide access £1200" and i would put a number, say "1" this would then be written on the invoice i sent out, which would then be put in a ring binder.

 

Other bit was your "input tax" This was the money you spent out, so, in the appropriate bit of the book i would write, say. "16/09/2022 Shell filling station, £50" and a number, say "1" for this one too. This number would be written on the receipt from the petrol station which would then be put in another ring binder. When it was time, i simply added it all up and filled in the simple form from the VAT people and sent it off with the payment. Same records were used for the tax people, because you are taxed on your profits, and, as i had a record of every penny spent and every penny taken in, this was easy to show. I only ever had two VAT inspections, and no problems with either. They just did things like picked out a reciept and an invoice and wanted to see the corresponding record in the book, this was simple as they were all numbered. Then they would ask the converse. They would pick a record from the book and want to see the corresponding receipt/invoice. Absolute piece of piss.. One book, two ring binders... How hard can it be??

 

john..

Edited September 16, 2022 by john87

[GarethM]

I'm similar to Woodworks, but won't be vat registered, even my day to day company isn't vat registered even though I import equipment from abroad and could save.

 

On the one hand yes you can gain a little claiming it back and against machinery purchases, but to a certain degree that applies to even none vat registered companies.

 

Personally, I'd just take it on the chin and just pay the VAT. Unless you're running 40k as a sole trader, what's yours is then yours minus usual taxes etc.

[openspaceman]

2 hours ago, Woodworks said:

We do logs on a small scale (300-350 cube per year) 

 

We went VAT reg which was great while setting up and buying kit. Now it saves us nothing and cost extra in accountancy. 

may be worth deregistering then as the value of kit you have left on the books will be well written down and that value is what you will have to pay 20% on.

[openspaceman]

Mind  if all your outputs are 5% VAT there is less advantage