The Wholesale Forums

[andy]

ok thanks alot for all your help I feel alot smarter now.

[worktillyoudie]

How legal is 2 businesses, 1 for B2B (VAT registered) and 1 for B2C (not VAT registered)? Selling same product etc...

[greedyboy]

It is possible but not recommended as commercially you are selling the same product and quite obviously avoiding paying VAT. Believe it or not the VAT man is not silly.

[worktillyoudie]

Silly or not, what law would i be braking?

[greedyboy]

There would be no genuine commercial reason to have two companies trading in the same product with one registered for VAT and the other not. Therefore you would be breaking the law by avoiding TAX.

More info can be found in this very thread.

Don't shoot the messenger

[andy]

Ok so thers no way for me to show what vat has been payed on goods when I sell them to my customer, meaning they cannot claim it back.

However If I have goods sent into this country and direct to my customer they will be invoiced by me for the value of the goods the delivery cost and the markup, the VAT / import duties will either be charged by the haulier or customs at the point of delivery or import.

They then can use the invoice from the haulier or customs to claim the VAT back, am I right???

[greedyboy]

Originally Posted by andy

Ok so thers no way for me to show what vat has been payed on goods when I sell them to my customer, meaning they cannot claim it back.

Correct. Your import liabilities makeup your cost price.

However If I have goods sent into this country and direct to my customer they will be invoiced by me for the value of the goods the delivery cost and the markup, the VAT / import duties will either be charged by the haulier or customs at the point of delivery or import.

They then can use the invoice from the haulier or customs to claim the VAT back, am I right???

If you invoice the customer, then you are exposing yourself to not declaring the import VAT a d Duty (if applicable) paid as you are the importer.

That is the complicated part as your customer has paid it and you are both based in the UK (I presume). If you were invoicing it from overseas then it's not a problem as you would be the exporter.

It would only show up on an inspection which may never happen. However mobile phones are notoriously suspect to inspections, even unannouced ones as I have experienced personally!!! Also because of the value of the transactions, your turnover will be high and therefore increasing the likelyhood and the frequency of inspections.

I'm not saying you can't do it. Do it once and you will get a clip round the ear from the VAT man. Continue to so it and you are opening yourself up to all kinds of problems. As I said previously, the VAT man is not silly. It would be quite obvious what you where doing and why and hence I recommend you avoid it.

When dealing in imports it is essential to keep a proper paper trail for the above reasons.

[andy]

I dont understand what the problem would be,

I am no expert on importing but I allways thought if I ordered something from the us for egxample when it reached the uk the curiour would be charged VAT which they then charge the recipient of the goods upon delivery.

Unless the recipient of the goods has registered with hmce and then they will be billed by hmce for the vat/import.

Therfore the VAT has been payed in full.

And my customer will have an invoice showing that VAT which they can then claim back.

Please point out if I am wrong?

I dont want to avoid tax, I want to prove what tax has been payed.

[greedyboy]

Originally Posted by andy

I dont understand what the problem would be,

I am no expert on importing but I allways thought if I ordered something from the us for egxample when it reached the uk the curiour would be charged VAT which they then charge the recipient of the goods upon delivery.

Unless the recipient of the goods has registered with hmce and then they will be billed by hmce for the vat/import.

Therfore the VAT has been payed in full.

And my customer will have an invoice showing that VAT which they can then claim back.

Please point out if I am wrong?

I dont want to avoid tax, I want to prove what tax has been payed.

As I said above! When you bring something into the country you are the IMPORTER. The IMPORTER (that is you) is responsible for the charges and not YOUR customer. That is the correct accounting procedure i'm afraid.

[andy]

would the vat man be annoyed if my customer payed the vat and not me?

I could get the charges diferred to me, would they insist I do this. or would they let me allow my customer be charged for the vat?