VAT Registration

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VAT Registration

Postby joyh » Sat Aug 07, 2010 5:07 pm

Two part question, please:

1)
Suppose a distributor earned £100 in commission.

I assume (from a perspective of only having placed my FIRST retail order today!) they will get a cheque for £100 at the end of the month.

Now suppose that same distributor is already VAT registered in their "day business", would they get a cheque for £117.50, or would they have to send £17.50 FROM the £100 to our lovely HMRC?

2)
VAT registration is voluntary, but quite handy for claiming back VAT on business expenses. Setting aside expenses, as it's hoped they'll eventually be tiny in comparison to sales, based purely on retailing products, is it more profitable to retail as a VAT registered distributor, or non-VAT registered - or is there nothing in it?

Sorry if this is getting nit-picky, but questions from a potential distributor wondering whether to run FM through an existing VAT-registered company or just open a separate bank account and trade as "non-VAT-registered".

I know the standard advice is "ask his own accountant" but (for example) my accountant has no understanding whatsoever of our type of business :lol: and - as a business person myself - I just feel I ought to KNOW !!

Thanks - to anyone who is still reading :lol:

(Sue - please see your email!)
What doesn't kill you makes you stronger (misquoted, but you know what I mean)
http://www.ExtraIncomePerfume.com
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Re: VAT Registration

Postby SooP » Sat Aug 07, 2010 10:46 pm

Hi Joy

You should NOT be V.A.T. Registered unless you are turning over 70k in your business.
Inland revenue will pick up on this. :| There may well be penalties for misleading Inland Revenue!

V.A.T. Is going up to 20% in January 2011.

You definitely need to run your FM business as NOT VAT registered at this point in time.
I have sent you an email and will talk you through all this But have put this quick answer here as an answer that many of our teams will be asking.

If any forum members have concerns about personal taxes and VAT please feel free to ask away, its a complex and complicated business issue unless we follow just a few simple rules.

Some of my team members have a SIMPLE spread sheet that I made for them to keep a record of their FM business any forum member that wishes to have a copy of this just send me a pm

SueP
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Re: VAT Registration

Postby joyh » Mon Aug 09, 2010 10:50 pm

Hi Sue

Thanks for your time and for correcting the mis-leading advice my friend had had.

Simple sounds MUCH more attractive!

Joy
What doesn't kill you makes you stronger (misquoted, but you know what I mean)
http://www.ExtraIncomePerfume.com
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