The Wholesale Forums

[uhafmail]

What would the value be on the laptops as they are new but broken if that makes sense.

[overlander]

Originally Posted by D M

Are you VAT registered? If not, No.

Yes - VAT registered

[ADC]

Originally Posted by uhafmail

What would the value be on the laptops as they are new but broken if that makes sense.

The value doesn't matter because you would be able to claim back whatever duty they charged you. The process is called IPR (Inward Processing Relief). Have a look at this link:-

http://www.businesslink.gov.uk/bdotg...79840705&r.s=e

[oBlaZeX]

Scenario:

Ordering products (CD-Rom, Software, Applications) from a wholesaler in America. They roughly cost within the region of $51 for a Internet security suite (Software). I roughly order10-20 of these items and the wholesaler sends the items by a courier. What kind of price mark-ups for import duty, VAT, Admin & Delivery are we looking at. In another thread, (PDF) i read that CD Roms with applications receive no VAT charge.

Basically what would happen after placing this order:

What would i have to pay?
Would i have to collect the items?
How much of a mark-up?

Thanks!

The article is very good, it clears up the basics of paying VAT & Import costs incurred, very helpful.

[bunique]

Hello,
Forgive my ignorance.
My husband and I do a few big expos in the UK. We are based in Germany. Do we have to pay a VAT tax or declare the items we are taking across the border? It is not likely we will do over 15,000 in direct sales. Thanks for any help.

[rich1982]

Very Helpful

[TYLOLA]

Originally Posted by malcolmk133

Well there seems to be alot of questions going around about VAT and registering for VAT and such so I thought I'd write a little guide.

What is VAT?

Generally speaking, if you import anything from outwidth the EU you are eligible to pay tax on it, this tax is know as VAT ( Value Added Tax ). Goods are considered imported if they have arrived directly from outside the EC or via another EC country without being released into free circulation. When you import you'll normally have to declare any goods that you have imported to HRMC (Customs) and pay any VAT duty that is due. You can get a downloadable decleration form from here.

What is Import Duty is it the Same as VAT?

Import duty is another fee that you may have to pay upon importing goods into the UK. Import Duty depends upon the nature of the goods, their value and the country of their origin. For details about the rates of duty applying to particular goods you can call the HM Revenue & Customs Tariff Classification Service Enquiry Line on Tel 01702 366077.

If your goods are coming from a country within the EC you do not have to pay any import duty on them. Note that, unlike VAT, duty can't be reclaimed, even if your business is VAT-registered.

How to defer Import Duty and VAT

If you import reguarly you can set up a deferment account with HMRC which will allow you to put off paying for about 30 days and your items will be released from customs much quicker. Setting up a deferment account is free but you will need your bank to guarantee you. You can read details about how to set up this account on the HMRC website.

HRMC also have a simplified Import VAT Accounting (SIVA) scheme which allows you defer import VAT without having a guarantee from your bank. There are conditions and not all businesses are eligible but you can phone the HM Revenue & Customs National Advice Service Enquiry Line on Tel 0845 010 9000 if you are interested.

Registering for VAT and Reclaiming VAT

This seems to be what is causing confusion here. You are not forced to register for Vat Unless:

At the end of any month, the total value of your taxable supplies you have made in the preceding 12 months (on a rolling 12-month basis) exceeds £61,000 (which has been the limit with effect from 1st April 2006),

Or at any time you expect that the value of your taxable supplies in the following 30 days will be more than £61,000.

If you have bought a business and you are not sure if you may be able to keep the last owner's registration number.

Registering for VAT means that you are eligible to reclaim VAT from HMRC. This claim should be made on your VAT return for the period during which the goods were imported. HM Revenue & Customs (HMRC) will send you a C79 certificate to show what import VAT you have paid, and you will need to keep it as evidence to support your claim.

Hope this helps

Malcolm

So because i am not earning over £61k per year... i can tell HMRC that i no longer wish to pay / claim VAT?

[PT]

Originally Posted by TYLOLA

So because i am not earning over £61k per year... i can tell HMRC that i no longer wish to pay / claim VAT?

You can deregister for VAT, you will need to contact HMRC to do this (fill out a VAT 7 form).

This doesn't mean you won't have to pay VAT, everybody has to regardless of them being VAT registered or not. What you won't be able to do is claim any VAT you pay, back. But you won't have to charge it either.

Generally speaking, it's best not to register unless you need to. There are exceptions to this, an accountant is the best person to talk to (before making the decision to register or not).

[TYLOLA]

Originally Posted by PT

You can deregister for VAT, you will need to contact HMRC to do this (fill out a VAT 7 form).

This doesn't mean you won't have to pay VAT, everybody has to regardless of them being VAT registered or not. What you won't be able to do is claim any VAT you pay, back. But you won't have to charge it either.

Generally speaking, it's best not to register unless you need to. There are exceptions to this, an accountant is the best person to talk to (before making the decision to register or not).

Thanks PT

Accountants too expensive at the moment, with the £ rate we can barely afford stock let alone popping an accountant on the books, so got the mrs involved on that (fingers crossed she won't mess up & get me a hefty fine)... Sales wise, i have to create invoices for all sales & put them through the books too?

At the moment it seems more is going out than coming in: stock, customs, eBay fees, software e.t.c... this should turn around shortly as we've paid for all the essentials now, would this cause a problem if in the tax return it shows more money going out than coming in?

[PT]

Originally Posted by TYLOLA

Sales wise, i have to create invoices for all sales & put them through the books too?

When you get a sale, document it in some way, be it in an Excel file or through an accounting program such as QuickBooks. Each method is different, but all will be fairly straight forward I imagine. You only need to record the date and amount paid, but it's a good idea to keep some more information for your own benefit. All sales inputted will contribute towards your profit/ loss. Remember, all payments your recieve must be accounted for.

You don't necessarily need to create an invoice for each sale, if business-to-business, you should really and if you don't, you'll probably be asked for one. If you're using a program such as QuickBooks, they can generate them for you anyway, based on the sales information you inputted.

You should keep a copy of the payment receipt, be it a PayPal one, bank transfer, or even a postal order. These will also document any fees incurred as a result of that payment, which can be taken away as an expense.

What I do is store all monthly statements, you can even do this with PayPal. It isn't practical to print each individual payment reciept if you don't need to.

Originally Posted by TYLOLA

would this cause a problem if in the tax return it shows more money going out than coming in?

Not at all. As long as you can prove all outgoings (i.e. keep receipts), there shouldn't be any problems whatsoever. It's not rare for businesses to make a loss, especially if they have only started trading recently. Don't worry about that.