Vat Query

Fon100

Registered User
Messages
2
Hi ,
I am currently in the process of setting up an e commerce store to sell a Christmas product. My sales revenue if going well ( a big if ) will prob be under 25k. The VAT threshold is €75000 for persons supplying goods . If I don't register for VAT on the basis that I wont exceed that threshold does that mean that I have wont have to apply VAT as part of the product price and no vat payment is due to revenue on the sales proceeds.

Any advice would be appreciated
 
It also means that the VAT you pay your suppliers cannot be recouped.

VAT is a tax on the person at the end-of-the-line and is passed along from manufacturer-wholesaler-retailer-customer with only the customer paying the VAT in the end. All others are cash-neutral.
 
Hi ,
I am currently in the process of setting up an e commerce store to sell a Christmas product. My sales revenue if going well ( a big if ) will prob be under 25k. The VAT threshold is €75000 for persons supplying goods . If I don't register for VAT on the basis that I wont exceed that threshold does that mean that I have wont have to apply VAT as part of the product price and no vat payment is due to revenue on the sales proceeds.

Yes

It also means that the VAT you pay your suppliers cannot be recouped.

Yes

VAT is a tax on the person at the end-of-the-line and is passed along from manufacturer-wholesaler-retailer-customer with only the customer paying the VAT in the end. All others are cash-neutral.

not wrong, but very misleading.

If the OP is selling to retail customers, not being registered for VAT means s/he gets to keep €100 out of €100 sales (before costs obviously), if they were registered they would have to pay €13 of that €100 in VAT.

It is true that not being registered means they cannot reclaim the VAT they pay to suppliers, but unless they are 1) selling at a loss and 2) have no non VAT costs (wages, rent, interest etc.) that will be a smaller number.
 
If the OP is selling to retail customers, not being registered for VAT means s/he gets to keep €100 out of €100 sales (before costs obviously), if they were registered they would have to pay €13 of that €100 in VAT.

In your example in the real-world, if selling to retailers, the OP would increase his price to cover the VAT and his cusomers (retailers, so likely VAT registered themselves) would know how to reclaim the VAT themselves i.e. the increase in total price charged to the retailers would not equate to an increase in costs for the retailers (and the OP could then also in this case, keep €100.

VAT can get complicated. The OP needs professional advice, IMHO from the question posed.
 
In your example in the real-world, if selling to retailers, the OP would increase his price to cover the VAT and his cusomers (retailers, so likely VAT registered themselves) would know how to reclaim the VAT themselves i.e. the increase in total price charged to the retailers would not equate to an increase in costs for the retailers (and the OP could then also in this case, keep €100.

Yes.

From a practical point of view wether the OPs customers are registered for VAT or not makes a big difference.

I am not sure about needing professional advice. If the OP is supplying goods and expects to turnover to be in the region of €25k he does not need to register for VAT. What more is there to say.
 
What more is there to say

Quite simply, that if he is selling to retailers who don't care if he charges EUR100 without VAT (ie not registered) or EUR123 with VAT (ie VAT registered), then he should register if he is paying VAT on his expenses or paying VAT on the goods he is selling onwards, because then he can claim that VAT back.
 
Quite simply, that if he is selling to retailers who don't care if he charges EUR100 without VAT (ie not registered) or EUR123 with VAT (ie VAT registered), then he should register if he is paying VAT on his expenses or paying VAT on the goods he is selling onwards, because then he can claim that VAT back.

If he is selling to VAT registered traders, (not what I understood from the first post) then there is probably an advantage to him in voluntarily registering for VAT. As you say he could reclaim VAT on his inputs. There would be a cost to him in terms of keeping compliant with the requirements and returns needed.
 
Hi ,
Thanks for all the post's much appreciated , just to clarify that we don't intend on selling to Vat registered traders our customers will be non vat registered. It would prob best to sit down with an accountant to go through pros and cons of voluntarily registering for VAT, I just want to cover all bases and make sure that nothing is being overlooked that may be an issue down the line.
 
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