FOAK: Charging VAT

In a week or so I plan to start selling educational training dvds. As I
am self employed, do I need to charge vat? From what I can see, so long
as I take in under £58k then I don't need to charge it or notify anyone.

Also, can I effectively double that £58k limit to £116k because the dvd
was produced by 2 of us and we will be splitting the money (although it
will go through a single bank account)

 

I'm not an accountant, but I would expect the HMCE would see this as
being a single trading entity and the £58k would apply.

Unlike income tax, partners don't have individual VAT thresholds.

 

IANAA

IIRC if your turnover looks likely to exceed a quarter of the
threshold in any finacial quarter, then you must register, even if the
yearly turnover does not meet the threshold. In other words, if you
hit £14,500 turnover in 3 months because of 1 massive order you need
to register for the year.

No, unless you trade completely separately from each other. A
partnership is an entity in itself.

--
ColonelTupperware
spouting bollocks on Usenet since 1997
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http://www.hmce.gov.uk/channelsPort...rtal?_nfpb=true&_pageLabel=pageVAT_InfoGuides

HTH

 

When I was contracting I always viewed charging VAT as like a bonus.

Basically I charged VAT, put the VAT amount (and the Corp Tax for that
matter) in a higher interest account (and DID NOT SPEND IT - this is very
important) and then when I had to do a VAT return, paid them the money owed,
but put the interest back into the company.

It really isn't a hassle and as long as you keep your payments up to date
they seem friendly enough.

 

Miss one and they're fucking unfriendly though. My accountant made a mistake
and I rang up to inform them the payment would be a little late. I talked to
what sounded like a sweet old grandmother. She was really nice about it
until she ended "Well it's not a problem this time but next time you may be
in serious trouble".

 

Ta for all the help guys. I've been round and round all the official
websites but there are LOT of pdf guides. At one point I was hoping that
because these are educational, they might be tax exempt, but it seems not.

What sort of records will I have to keep and what will I have to issue?
and what about international sales? Lets say I sell the product for
£40+vat = £47. Do I just have to put on their receipt that the 2 items
are seperate?

Aggh, sweet jesus this get more complicated. I also do software training
through an agency where I charge them £x per day. Do I now have to add
vat on top of those charges? should I swallow the vat? would they mind
if I add vat on top?

 

I would suggest you phone up Customs and Excise and ask them, or see a
tax/company advisor - in your case it sounds like the initial expense would
be worth it to a) make sure you know what you need to do and b) make the
most money rather than the least out of it.

In terms of records, same as everything else - full invoices, statements
etc.

Bear in mind one of the other advantages of being VAT registered is that you
can claim back/offset the VAT on business purchases. Some people here (not
me - I only bought IT stuff) have used that to purchase 'company'
motorcycles and the like.

 

This is all elementary stuff which an accountant or other advisor should
be able to help you with - but you DO need to check with someone
qualified.

Then use an accounts program such as quickbooks - it will automatically
calculate VAT based on the items you sell (you set these up once and
then it remebers the VAT ratings for each in future). It will
automatically allocate the VAT elements to a liabilities report and will
generate the info you need for filing in your quarterly VAT returns.


--

jeremy
['75 RD250A ] | ['02 Fazer 600 in blue]
_______________________________________
jeremy at hireserve dot com

 

Bear in mind that you can claim VAT back on the year preceding
the date you register.

Get the details from an expert but it's a one off chance you
should not miss.

An imaginative accountant could put lots of expenses in the
setting up costs.

 

Also bear in mind that some things you claim for have to be accounted for
for a while if and when you knock the VAT thing on the head.

 

<continues to check post nervously>

The IR, C&E and the DVLA all use those brown envelopes - I always get rather
worried whenever I see one come through the letterbox as I just know there's
a damn good chance it's not "good news".

 

I believe this is the case too

 

*suspicious look*

 

porl says...

Oh no, not the yellow letter.