Okay... I Found This Site, A Wholesaler For Software... I Found The Prices To Be Reasonable . . . However The Prices Are Not Including Vat . . . And That Is 17.5% I Believe, Which Leaves Me With Very Little Profit Potential . . .

Why Do They Charge "vat" . . . . What Is Its Purpose

Oh, And Ive Heard If You Become Vat Registered You Can Claim Back The Vat Charges . . . .

Is This True . . .

Any Help Will Be Much Appreciated . . . Thankyou

as far as im aware if your vat registered you claim the vat back that you pay your suplier but then charge vat to your customers wich you pass on to the nice folks at revenue and customs

ive never been vat registered so i could be wrong

Andy

Originally Posted by TheBear

as far as im aware if your vat registered you claim the vat back that you pay your suplier but then charge vat to your customers wich you pass on to the nice folks at revenue and customs

ive never been vat registered so i could be wrong

Andy

but if your claiming the vat back, to pay them again . . . whats the point lol

In simple terms:

If you are VAT registered = you ignore the VAT

If you are NOT VAT registered = the additional 17.5% becomes part of you cost and you CAN NOT claim it back.

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Originally Posted by greedyboy

In simple terms:

If you are VAT registered = you ignore the VAT

If you are NOT VAT registered = the additional 17.5% becomes part of you cost and you CAN NOT claim it back.

great, but if i do become VAT registered, the site still make VAT part of the payment at the checkout . . . i cant just ignoor it . . . can i ..??

Originally Posted by lyrical124

great, but if i do become VAT registered, the site still make VAT part of the payment at the checkout . . . i cant just ignoor it . . . can i ..??

Again in very simple terms:

If you become VAT registered:

1) You still pay the VAT at the time of purchase

2) When you sell the item you also have to charge VAT

3) Every 3 months you will file a return which will calculate as follows:

All the VAT you received (items sold) minus all the VAT you have paid (on your purchases). You can also claim the VAT on all business purchases/assets such as computers, desks, toilet roll, professional services etc).

You then send/receive the difference (you usually send if you are making a profit).

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Last edited by greedyboy; 20-08-2007 at 08:46 AM.

oh k i think i understand now . . . you pay the VAT then charge the same VAT back to the customer when you sell your item . . .

No you do not charge the SAME VAT.

You charge 17.5% of the invoice total.

SO if you sell 4 items for £25 + VAT the total will be:

£100 + 17.5% = £117.50

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I really really heat tax and math. LoooooooooooL. But may I ask a question : Is UK a only country which is charging VAT ?

Originally Posted by k1983525

Is UK a only country which is charging VAT ?

I think you will find that most countries have some form of sales tax. Where it varies is usually on the percentage they take from you.

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