When to become VAT registered....

[tired-boy]

Lets just say that my business starts next month (1st April) and i am not sure whether or not my turnover will exceed the £64,000 threshold.

If i get to Jan 1st (after a good XMAS) and my turnover reaches £64-00 and i am forced to become VAT registered, am i right in saying that it is from that point that i have to start charging and paying VAT on my sales and that i dont have to pay any VAT on the sales from April 1st to Jan 1st.

I am importing goods from China. If i am not VAT registered, then from April 1st to Jan 1st i will have to pay import tax and import VAT and no further VAT based on my sales. However, from Jan 1st when i become VAT registered (as in the above scenario) i will pay VAT based on my sales (Output Tax) and i will be able to re-claim the import VAT as Input Tax in order to work out just how much VAT i must pay.

Another point - If i sell an item at £100 and it costs £10 to send it to the customer. Do i have to pay VAT on £100 or the whole £110?

I hope i have been clear enough - sorry if any are confused, thanks in advance for your help.

[peterjhale]

Hi

If you are VAT registered you have to charge VAT on your SALES figures to customers in the EU. More information can be found at HM Revenue & Customs (nice and easy URL to remember )

[tired-boy]

Originally Posted by peterjhale

Hi

If you are VAT registered you have to charge VAT on your SALES figures to customers in the EU. More information can be found at HM Revenue & Customs (nice and easy URL to remember )

Hi there, thanks for the reply.

So, if i waited to get close to the threshold before i registered for VAT i would only have to pay VAT on my sales AFTER i had registered, i.e nothing is back-dated? My only VAT concerns prior to registering is with regard to Import VAT as i am importing goods fom China?

[peterjhale]

I believe you are correct. It's always best to check out the HMRC site or give them a call.

If you are not VAT registered and buy stuff with VAT in the price, you will not be able to claim the VAT back. But additionally, you won't have to charge VAT on your sales.

[tired-boy]

Originally Posted by peterjhale

I believe you are correct. It's always best to check out the HMRC site or give them a call.

If you are not VAT registered and buy stuff with VAT in the price, you will not be able to claim the VAT back. But additionally, you won't have to charge VAT on your sales.

Thanks again - I have checked the HMRC site and i have posted this thread just to see if i have understood what i have been reading. I have rung Revenue and Customs but they used quite a bit of heavy jargon that went over my head.

The amount of items i buy does not really make it worth me voluntarily registering for VAT, so at first it would not matter that i cant claim the VAT back in those instances.