VAT Registration

[david_h]

Recently set up my own business, Ltd company.

I import wheels from Japan, but am currently getting charged VAT by my supplier as I have no VAT number.

I registered for VAT online about 2 weeks ago, I have had no notification/contact since then.

Does anyone know roughly how long it will be before I can get my VAT reg. no. as I don't really want to start advertising until this is sorted.

Also, is it the first £60k turnover that I don't pay VAT on? I can't find any information on the VAT website.

Thanks in advance

[Smartie]

david_h said:

Recently set up my own business, Ltd company.

I import wheels from Japan, but am currently getting charged VAT by my supplier as I have no VAT number.

I registered for VAT online about 2 weeks ago, I have had no notification/contact since then.

Does anyone know roughly how long it will be before I can get my VAT reg. no. as I don't really want to start advertising until this is sorted.

Also, is it the first £60k turnover that I don't pay VAT on? I can't find any information on the VAT website.

Thanks in advance

Usually takes 3 - 4 weeks, but ring them and let them know its urgent and they may speed things along.

£61K is the compulsory limit for registration, ie if your turnover is below this then you do not need to register, but can if you choose, over this and you must register. Once registered then all (relevant) sales are subject to VAT, you dont get a "VAT free" allaowance!

[david_h]

thanks for this.

I plan on charging VAT to everyone in any case, it will be UK domestic sales. Main advantage is my supplier won't charge me VAT, and I doubt turnover will hit above 61k for at least 2 years.

Will give them a buzz tonight to remind them it's quite urgent.

[vex]

You can claim any VAT back on items for re-sale you have bought going back over 6 months and on office items (inc PCs etc) for upto 2 years.

Great for us start ups.

Chris

[vixpy1]

david_h said:

thanks for this.

I plan on charging VAT to everyone in any case, it will be UK domestic sales. Main advantage is my supplier won't charge me VAT, and I doubt turnover will hit above 61k for at least 2 years.

Will give them a buzz tonight to remind them it's quite urgent.

He will charge you the vat, but you can claim it back from the vat man, offseting it against the vat you charge to your customers

[david_s]

david_h said:

thanks for this.

I plan on charging VAT to everyone in any case, it will be UK domestic sales. Main advantage is my supplier won't charge me VAT, and I doubt turnover will hit above 61k for at least 2 years.

Will give them a buzz tonight to remind them it's quite urgent.

If you are importing from Japan then you are correct in your statement the your supplier will not charge you VAT. Unfortunately however you will have to pay VAT on the full value of the goods and freight (and insurance!) at the point of entry to this country. The VAT has to be paid by you or your agent before the goods are released from Customs, either at the airport or port.

And as previously stated, there is no VAT free allowance! The benefit of being registered is that you can claim back VAT paid on supplies, but you have to pay it on sales.

[RichUK]

I just set a new company up, the VAT reg took 3 weeks to come through. I applied online, had to send some extra info, and the form arrived a couple of weeks later.

In the meantime any invoices I needed to send out, I sent out with a VAT inclusive total, and re did them all last weekend with the VAT on properly.

[jconsta6]

Just to backup what Rich touched on, if you are operating under 61k, then provide them with some copies of receipts for purchases.

I've applied before and they have refused, yet after providing receipts have agreed.

All I'm saying is that, just because you apply, unless you are over the threshold, they don't have to register you for VAT, however usually will if you provide some evidence that you are making purchases etc for the business. For example, its not uncommon for companies to have a high outgoing when starting up, but virtually no turnover.

Cheers,

JC

[Eric Mc]

Have they the right to do this?

As long as you are a bona fide trader, you should be able to register for VAT without reaching the compulsory threshold.

I would assume they reason they wanted to see your purchase invoices was to check that you really were running a business.

Indeed, if you are running a business where the bulk of your sales are Zero Rated (food, some comstruction work, some clothing etc) it would be in your interest to register from Day 1 as you would be receiving VAT refunds every quarter (or even every month if you went for the Monthly VAT Return option).

[davidy]

david_h

When importing goods you can only reclaim the VAT using a HM Customs C79 form, you should be sent one every month, you cannot reclaim the VAT using the shipping companies paperwork.

Having done this in the past, I would recommend setting up an account with one shipping company and use them to collect your goods from Japan and import them into the UK. They will handle the clearance, duty and VAT and send you a bill comprising of duty on items and VAT due on items, they will normally send you a seperate bill for the shipping costs (which you can claim the VAT back on). At the end of each month customs will send you a C79 which you use as input tax in your VAT return. Always cross check your C79 against your shippers invoices (mistakes can get made either way!)

Eric will no doubt be able to explain more, but you really need to get this right from the off. I got pulled up at a VAT inspection years ago about reclaiming the VAT off FedEx invoices and not from the C79. In actual fact this worked in my favour (cashflow wise) as most of my suppliers would ship before the end of the month and the goods would clear customs before the end of the month and therefore appeared on the C79, but I wasn't claiming until the FedEx invoice arrived wich could be a couple of weeks later. So the VAT man very kindly improved by VAT cashflow by two weeks!

Hope that helps

davidy

[david_h]

Sorry I should have clarified, thanks for all the information, some highly knowledgeable people on here when it comes to start ups.

Though I'm importing the goods from Japan, they actually come via a European distributor (separate company), so they are responsible for sorting customs/VAT re: Japan.

Because I'm dealing with the EU distributor who is charging me VAT I would like to reclaim this, I will of course charge it at the other end.

Great news that I can reclaim VAT on any invoices going back 6 months, so for the latest set of wheels I have sold I can reclaim the VAT back in the future even though I currently have no VAT reg. no.

[Smartie]

david_h said:

Great news that I can reclaim VAT on any invoices going back 6 months, so for the latest set of wheels I have sold I can reclaim the VAT back in the future even though I currently have no VAT reg. no.

You can only reclaim the VAT on the goods you still have in stock on the day your registration takes effect, and then you obviously have to charge VAT when you sell these goods.

You can also reclaim the VAT on any assets (ie computers, office equipment, tools, etc), again that you still own on the day of registration.

[2 sMoKiN bArReLs]

Isn't he talking about foreign vat? (on the purchases) in which case it's quite different.

Edited by 2 sMoKiN bArReLs on Wednesday 26th July 18:24

[2 sMoKiN bArReLs]

Sorry David to refer to you in the third person

[davidy]

Why is the European distributor charging you VAT when he is 'exporting' the goods?

davidy

[2 sMoKiN bArReLs]

davidy said:

Why is the European distributor charging you VAT when he is 'exporting' the goods?

davidy

Because if you cannot provide him with a VAT number he is obliged to do so.

[davidy]

Thanks 2SB, in all my businesses over the last 12 years I've been VAT registered, so it hasn't been an issue.

As always there is alwys something to learn about the VAT system!

davidy

[david_h]

2 sMoKiN bArReLs said:

davidy said:

Why is the European distributor charging you VAT when he is 'exporting' the goods?

davidy

Because if you cannot provide him with a VAT number he is obliged to do so.

You hit the nail on the head, this is why I need to be VAT registered. I can't provide him with a VAT number atm as I am not registered, so he treats me like a customer buying from him and charges 16% German VAT.

Once I'm registered he won't charge me VAT.

Thanks again for all the info. people.

[Graham]

Eric Mc said:

Have they the right to do this?

As long as you are a bona fide trader, you should be able to register for VAT without reaching the compulsory threshold.

I dont know if they have the right but they do.

I have a couple of companies that do different things, on owned only by me and two owned by me and others.


when i registered the first company, no problems at all

a couple of year later when i registered the 2nd the vat man came around un anounced to visit me to check us out. ( he knew a lot about me as well, right down to my car )

try to register the third co another year or so later and get refused as they want to see any contracts we have in place first !!!

[Eric Mc]

Sounds like they were just checking up due to your multiplicity of businesses.