VAT on old stuff sold via EBay
Discussion
As part of vacating an old office we have sold old furniture and bits'n'bobs (Leverarch files etc) on Ebay.
We are a VAT registered charity but cannot claim VAT back on our purchases and do not charge VAT on the vast majority of our supplies.
Do we have to treat the income from the sale of old stuff as VAT'able?
We are a VAT registered charity but cannot claim VAT back on our purchases and do not charge VAT on the vast majority of our supplies.
Do we have to treat the income from the sale of old stuff as VAT'able?
Eric, I think that is broadly right, but I think the sales might be subject to the second hand goods scheme?
OP, if that is the case, you would need to account for VAT only on the margin (broadly sales price less cost), and only if you make a profit on the sale (unlikely?). So you may end up in the same place of no VAT, but for a different technical reason.
OP, if that is the case, you would need to account for VAT only on the margin (broadly sales price less cost), and only if you make a profit on the sale (unlikely?). So you may end up in the same place of no VAT, but for a different technical reason.
Alpinestars said:
Eric, I think that is broadly right, but I think the sales might be subject to the second hand goods scheme?
OP, if that is the case, you would need to account for VAT only on the margin (broadly sales price less cost), and only if you make a profit on the sale (unlikely?). So you may end up in the same place of no VAT, but for a different technical reason.
That was my logic pretty much. If VATman expects us to charge output tax surely we would be entitled to reclaim input tax, in which case we'd be entitled to a VAT rebate. I've told the Accounts receivable guy to put it through as an exempt supply.OP, if that is the case, you would need to account for VAT only on the margin (broadly sales price less cost), and only if you make a profit on the sale (unlikely?). So you may end up in the same place of no VAT, but for a different technical reason.
Would the second hand goods rules apply to the sale of trading stock rather than Fixtures and Fittings and other Capital Items?
If the entity had reclaimed the full VAT when they bought the item, then they should charge the full VAT when they sell it.
The second hand goods scheme assumes that the items being bought are not having any VAT being reclaimed on them at the time they are being bought.
If the entity had reclaimed the full VAT when they bought the item, then they should charge the full VAT when they sell it.
The second hand goods scheme assumes that the items being bought are not having any VAT being reclaimed on them at the time they are being bought.
Alpinestars said:
It doesn't matter that they don't trade in these items. What matters is that the charity is VAT registered. That's what triggers the VAT requirement.
Yes - but if they bought stuff and reclaimed the VAT when they bought it (which they are allowed do) then they would have to charge the full VAT on the sale of that "stuff" later on?They CAN reclaim Input VAT on stuff they buy -
a) if they are buying from a VAT registered supplier
b) they have a VAT invoice showing the relevant VAT data
If they sell such items at a later date, they MUST charge VAT at the appropriate rate on the sale
They CANNOT reclaim VAT on goods purchased under the second second hand scheme.
They will account for Sales VAT at the relevant Second Hand Margin Rate on the sale of such items.
a) if they are buying from a VAT registered supplier
b) they have a VAT invoice showing the relevant VAT data
If they sell such items at a later date, they MUST charge VAT at the appropriate rate on the sale
They CANNOT reclaim VAT on goods purchased under the second second hand scheme.
They will account for Sales VAT at the relevant Second Hand Margin Rate on the sale of such items.
Guerrero said:
Exempt - VATA94 Sch9 Group 14 - Supplies of Goods where Input Tax cannot be recovered
I think you might be right on the basis that OP said that input VAT CANNOT be reclaimed. Sorry to revisit this but it's probably more complicated than first appears.
I think Guerrero is right but only if the charity COULD NOT reclaim the VAT. But, unless the goods were used exclusively for the non taxable bit of the business, you should have been able to claim some VAT when you purchased them. Eg if the goods were used for both taxable and non taxable supplies. If this is the case, and you did not claim the VAT (but were entitled to claim some) I think you have to charge VAT on the full sales price. The items you've alluded to appear to be overhead type stuff so you should have been able to reclaim some VAT.
I think you need to establish why VAT (some or all) was not recovered in the first place. And that will lead you to the answer.
Edited by Alpinestars on Saturday 23 August 11:51
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