"This item has no VAT charge that's why its cheaper"
Discussion
I'm fancying a new MacBook Pro. A seller on Amazon has the best model for £400 less than the price on the Apple store. In the Q&A section someone has asked "How is this model £400 cheaper than exactly the same model on Apple Store?". The seller has answered "This item has no VAT charge that's why its cheaper". So, what happens about the VAT? Is this legal? If I buy this item will I have to pay the VAT myself? What's going on?
I remember once seeing a seller on eBay shifting Apple gear with similar discounts. There were literally thousands of positive feedback so they’d clearly been trading for a good while with no issues. It would be useful to save £400 on a new MacBook Pro but I want to make sure I don’t end up with an unexpected tax bill or some other, more serious, penalty for participating in a tax dodge.
Surely it is the seller who is responsible for the VAT.
When they buy their stock in They pay VAT to their supplier, who then passes it on to the revenue.
They are then responsible for adding the VAT to the product and charging that to the end customer.
If they don't then they are the ones the Revenue will chase.
In this case it sounds dodgy, but they are ultimately the ones who will get clobbered if the Revenue catches up with them.
When they buy their stock in They pay VAT to their supplier, who then passes it on to the revenue.
They are then responsible for adding the VAT to the product and charging that to the end customer.
If they don't then they are the ones the Revenue will chase.
In this case it sounds dodgy, but they are ultimately the ones who will get clobbered if the Revenue catches up with them.
If they are below the threshold, they don't need to be VAT registered, but that also means they should be paying the VAT to their supplier.
It could be possible they are buying from someone at VAT free prices, but somewhere along the line, HMRC is going to be wanting a cut. The idea is you should only be able to buy at the core price without VAT if you are VAT registered.
It could be possible they are buying from someone at VAT free prices, but somewhere along the line, HMRC is going to be wanting a cut. The idea is you should only be able to buy at the core price without VAT if you are VAT registered.
Yep, the VAT threshold for mandatory registration is £82k turnover.
If you are below that, it's optional.
If you are VAT registered, you can buy stuff from companies without the VAT being already added on. You'll see a lot of trade materials places selling stuff which advertise the ex VAT rate.
EricMC or some other accountants would know better, but I was under the impression the supplier should be taking records of where their goods are going with a VAT number.
HMRC would go to the supplier, see that they have sold £100k of computers and say that should mean they are owed £20k VAT.
The supplier would then say those goods have been passed down the line to X, Y, and Z, and they'll pay the VAT on the next sale price, which isn't bad for HMRC as each step in the line would mean the additional profits and higher sales prices, and higher VAT, but it shouldn't just be disappearing off the radar.
I would imagine HMRC if they want to investigate would start going down the line finding the point where the first sale was made to someone non VAT registered and that's where they would charge it.
Either way, I don't believe there is any legitimate way to shuffle goods around and avoid paying VAT.
I'm below the VAT threshold, so no VAT is charged on anything I sell or do but that's because I've already paid it on any materials and bits already.
If the guy is getting stuff without the VAT paid, either he's given a dodgy VAT number to the supplier, or the supplier hasn't been paying attention and will probably send a letter at the end of the tax year saying "Hey, we forgot to get your VAT number, can you let us know", and then things will get tricky.
If you are below that, it's optional.
If you are VAT registered, you can buy stuff from companies without the VAT being already added on. You'll see a lot of trade materials places selling stuff which advertise the ex VAT rate.
EricMC or some other accountants would know better, but I was under the impression the supplier should be taking records of where their goods are going with a VAT number.
HMRC would go to the supplier, see that they have sold £100k of computers and say that should mean they are owed £20k VAT.
The supplier would then say those goods have been passed down the line to X, Y, and Z, and they'll pay the VAT on the next sale price, which isn't bad for HMRC as each step in the line would mean the additional profits and higher sales prices, and higher VAT, but it shouldn't just be disappearing off the radar.
I would imagine HMRC if they want to investigate would start going down the line finding the point where the first sale was made to someone non VAT registered and that's where they would charge it.
Either way, I don't believe there is any legitimate way to shuffle goods around and avoid paying VAT.
I'm below the VAT threshold, so no VAT is charged on anything I sell or do but that's because I've already paid it on any materials and bits already.
If the guy is getting stuff without the VAT paid, either he's given a dodgy VAT number to the supplier, or the supplier hasn't been paying attention and will probably send a letter at the end of the tax year saying "Hey, we forgot to get your VAT number, can you let us know", and then things will get tricky.
Every B2B transaction I make has VAT added, you simply cannot buy products or services from a legitimate supplier without the VAT added unless there's a specific exemption for that product or service.
As a VAT registered entity, we then claim that VAT back, or rather, we offset it against the amount we owe the tax man from goods and services we've supplied.
I should add that it's possible for us to supply EU customers outside of the U.K. without VAT added, provided that customer supplies their EU vat number.
On another note, Apple are notorious for not giving much margin in their products for resellers, I'd be amazed if it's possible for anyone legitimate to be able to sell on Amazon and make money once Amazon have taken their cut.
As a VAT registered entity, we then claim that VAT back, or rather, we offset it against the amount we owe the tax man from goods and services we've supplied.
I should add that it's possible for us to supply EU customers outside of the U.K. without VAT added, provided that customer supplies their EU vat number.
On another note, Apple are notorious for not giving much margin in their products for resellers, I'd be amazed if it's possible for anyone legitimate to be able to sell on Amazon and make money once Amazon have taken their cut.
Super Slo Mo said:
Every B2B transaction I make has VAT added, you simply cannot buy products or services from a legitimate supplier without the VAT added unless there's a specific exemption for that product or service.
As a VAT registered entity, we then claim that VAT back, or rather, we offset it against the amount we owe the tax man from goods and services we've supplied.
Gotcha.As a VAT registered entity, we then claim that VAT back, or rather, we offset it against the amount we owe the tax man from goods and services we've supplied.
Obviously not being in the VAT loop, I didn't know how it works. So generally it should be inescapable.
essayer said:
MitchT said:
Seller is in the UK. Seller info says they're not VAT registered so could that be the reason?
If they are not VAT registered then who has paid the VAT - either when they bought it from their UK/away wholesaler or when they imported it from outside the EU..Op, do you have a link to the product in question?
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