eBay and vat registered

[Kiroshi]

I am also gettting very very close to the VAT threshold. I am in a really tricky situation where I am wondering if it is best to actualyl scale back sales and keep below, or just deal with it.

My issue is most items I sell will need to be put up (then they wont sell other other sellers) or take the hit my end. The thing that screws me is a lot of my products are low ish margins and high volume. That final profit after vat has come out will basically make it not worth doing.

Really stressing me out, as I have gone from having so many plans, built a website, SEO all that jazz and now I am considering pulling everything back just to keep under!

My main stock I buy from Europe and that country only charges 6% VAT whereas we charge 20% on the same thing. This means as non registered it works out great for me, but hinders me even more in a VAT registered world.

[vetus]

So why don't you register for Flat rate scheme of 12% hence keeping another 8% for a further £250k of turnover?

[stevebills]

The original answer was not answered it was side stepped and how can someone charging vat compete with no vat seller?

[vetus]

Buy in bigger bulk, better pricing, difference in prices to cover the 12% or at least part of it.

It's a starting block.

Lots of other options with regards to company formation / location which could help.

[GreenBean]

Originally Posted by stevebills

The original answer was not answered it was side stepped and how can someone charging vat compete with no vat seller?

Mainly because this is the first time it was easy to read.... First attempt was mumble/jumble....

Sellers paying VAT usually have a vast range of items that allow them to compete.

Many may even have the luxury of older ebay accounts that have been nutured and grown to be most productivd money wise.

Choice is for a seller to decide the method they want to make money, imo.

Yes, I have VAT registered accounts.

[dan_ebay]

Originally Posted by stevebills

The original answer was not answered it was side stepped and how can someone charging vat compete with no vat seller?

Not sure what reply you're looking for, there isn't a magic answer. You'll make less profit if you're paying vat than if you're not

[JamesNorth101]

Originally Posted by stevebills

The original answer was not answered it was side stepped and how can someone charging vat compete with no vat seller?

Buy things for cheaper in larger quantity

There is no other answer really...

[Kiroshi]

Originally Posted by JamesNorth101

Buy things for cheaper in larger quantity

There is no other answer really...

This. There really is no fix. Its a case of 2 options:

1. Deal with it and pay more tax, encouraging you to push yourself even more to get higher sales, reduce costs etc

2. Reduce sales, dial it back and not hit the threshold

[blueuk]

Originally Posted by stevebills

The original answer was not answered it was side stepped and how can someone charging vat compete with no vat seller?

The point is, if you get to the stage where you need to register for VAT you are running a substantial business.

Now the problem with eBay business's, run from home, with zero overheads, is people tend to work on very very small margins.

Then when VAT comes into the equasion, it's enough to turn a profitable business into a pointless one.

You need a business plan with sales forecasts, go to an accountant if you are unable to do it yourself, and work out what amount of increased turnover is needed so you are better off.

Then work out if the increased workload is worth it. You may find you have a 30% increased workload to make the same money. However, higher sales equals higher turnover and higher turnover equals better buying power with suppliers.

[blueuk]

And after that you may find you'd rather stay under the threshold and carry on pondering along.

[stevebills]

You Should Avoid Registering for VAT for as Long as Possible…

Because when you do, you’ll have to pay more tax, as simple as that. You’ll either have to raise your prices to make up the difference which will make you less competitive OR you’ll
have to lower your profit margin to keep the same pricing as before. And it doesn’t matter how you look at this – when you register for VAT, you pay more tax, PERIOD!

That’s why it’s so crucial to stay away from VAT registration for as long as possible. Applying for VAT voluntarily may be the biggest mistake you ever make; it can simply kill your eBay business as in just one day you’ll become uncompetitive.

[JamesNorth101]

Seems like you have answered your own question there

[vetus]

Originally Posted by stevebills

You Should Avoid Registering for VAT for as Long as Possible…

Because when you do, you’ll have to pay more tax, as simple as that. You’ll either have to raise your prices to make up the difference which will make you less competitive OR you’ll
have to lower your profit margin to keep the same pricing as before. And it doesn’t matter how you look at this – when you register for VAT, you pay more tax, PERIOD!

That’s why it’s so crucial to stay away from VAT registration for as long as possible. Applying for VAT voluntarily may be the biggest mistake you ever make; it can simply kill your eBay business as in just one day you’ll become uncompetitive.

You could of said that in the first place stevebills - would of saved a 10 page thread

[Kiroshi]

He has copy and pasted from another article online which I have read a few months ago and called it his own

I'm not even joking

[Atom]

Originally Posted by Kiroshi

He has copy and pasted from another article online which I have read a few months ago and called it his own

I'm not even joking

I think I remember reading this from some guy call Andrew too....lol

[stevebills]

Originally Posted by Atom

I think I remember reading this from some guy call Andrew too....lol

I did find info on google and why would I re type it I'm to fooking lazy

[stevebills]

So there we go vat registered on eBay is a bad idea and will cost you sales and bookkeeping
Will get more expensive so avoid at all cost

[stevebills]

Don't pay the vat man for even bigger saving but don't get caught lol

[vetus]

But that doesn't mean ignore VAT and keep selling, don't fancy reading another sob story

[GreenBean]

Originally Posted by Kiroshi

He has copy and pasted from another article online which I have read a few months ago and called it his own

I'm not even joking

Glad you mentioned it.

Time waste again.

[GreenBean]

Originally Posted by vetus

But that doesn't mean ignore VAT and keep selling, don't fancy reading another sob story

Have you not worked out yet that Sob Story is the OP's real name.

In some other cases, the Virgin Innocent...

[e2free]

Just seen this thread and noticed most of people don't even understand how vat works specially advised to vetus and others who think flat rate vat is good

It's basically crap in simple words let me explain you

You register for flat rate and normally people pay 8% or 12% depending on your business what u sell

But you can't reclaim vat this is the biggest problem

For example you bought the stuff for £10000 and you paid £200 vat
Now you let says sold for £10000 aswell without making any profit if you on 12% you have to pay another £1200 VAT on this sale so total you paid £2000+1200=£3200 VAT SINCE u can't claim it back

Now of you normal vat then you don't need to pay that much

Sold for £10000 where u charged 2000 vat which you can claim it back so no more vat to pay so total you paid £2000 vat

So what's the batter option?

Flat rate is good for those who only providing services like solicitor or accountants as they don't purchase or sell physical goods

My advise to batter understand vat

Tobe honest 99% sellers are not vat register on ebay and Amazon where u can see their turn over is well over 82000

Goof luck