Quick VAT question
Discussion
Along with some new products our company sells a lot of second hand items, these are bought in from private sellers in most cases, refurbished and sold on for a profit. The VAT is owed on the profit due to the margin scheme and it works out well.
However we do have some interest in these products from a large company in Germany who want a consistent delivery of them, without bothering my accountant at a busy time can anyone tell me how VAT would work.
Obviously we are exporting so we would zero rate the VAT but would we still be able to pay VAT on the profit or would it then revert to paying VAT on the sales price, in which case it probably wont work financially as the goods are sold on a much smaller margin than a new product.
However we do have some interest in these products from a large company in Germany who want a consistent delivery of them, without bothering my accountant at a busy time can anyone tell me how VAT would work.
Obviously we are exporting so we would zero rate the VAT but would we still be able to pay VAT on the profit or would it then revert to paying VAT on the sales price, in which case it probably wont work financially as the goods are sold on a much smaller margin than a new product.
JCKST1 said:
Along with some new products our company sells a lot of second hand items, these are bought in from private sellers in most cases, refurbished and sold on for a profit. The VAT is owed on the profit due to the margin scheme and it works out well.
However we do have some interest in these products from a large company in Germany who want a consistent delivery of them, without bothering my accountant at a busy time can anyone tell me how VAT would work.
Obviously we are exporting so we would zero rate the VAT but would we still be able to pay VAT on the profit or would it then revert to paying VAT on the sales price, in which case it probably wont work financially as the goods are sold on a much smaller margin than a new product.
If you zero rate the VAT, then there's no VAT to repay to HMRC. However we do have some interest in these products from a large company in Germany who want a consistent delivery of them, without bothering my accountant at a busy time can anyone tell me how VAT would work.
Obviously we are exporting so we would zero rate the VAT but would we still be able to pay VAT on the profit or would it then revert to paying VAT on the sales price, in which case it probably wont work financially as the goods are sold on a much smaller margin than a new product.
JCKST1 said:
Doofus said:
If you zero rate the VAT, then there's no VAT to repay to HMRC.
I presume I would zero rate it, with it being an export?So the item is purchased second hand (No VAT payable), we then export it and zero rate the VAT?
No VAT is payable to HMRC, is that correct?
You will need and EORI number to export goods, which you can get via HMRC's website.
And you'll possibly find yourself faced with a s
tload of paperwork for each shipment, too.Edited by Doofus on Tuesday 8th March 18:48
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