The Wholesale Forums

[drew_viii]

hi, ive decided to go for making my own online site to sell stuffs... would like to know though if do i have to be a registered business company here in uk? i dont know the policies regarding this...

more details:
would like to make my own site with online checkout using credit cards etc...

products i bought are generally VAT included so do i have to register in order to pay VAT?

would like to make some sponsor links if ever...

and im just a beginner, doesnt really know how to do this, but would like to start designing my own site...

are there any guides for process to start an online business?

and oh yeah... little bit out of topic, how would my visitors know that my site is safe to buy? what can a seller do to provide trust and security for the buyers? especially for a new site...


thank you guys for your help in advance help me

[AALG_Andy]

Loads of good info can be found using the following link

http://www.startups.co.uk/

Also has a good forum

Andy

[mazzster]

I can answer the VAT one, you don't need to register until your turnover (total sales value) for any 12 month period reaches £60k, or if you expect your turnover to exceed £60k in the next month. As you're new, you probably won't have to worry about this for a while yet, so while the entirety of your sales income is yours, you cannot reclaim any input VAT on things you purchase (you can voluntarily register if you like, but for a new guy it's a fair bit of hassle, and if you're making a net profit, you're better off remaining unregistered).

Hope someone else can help you with the website stuff cos I can't!

[drew_viii]

Originally Posted by mazzster

I can answer the VAT one, you don't need to register until your turnover (total sales value) for any 12 month period reaches £60k, or if you expect your turnover to exceed £60k in the next month. As you're new, you probably won't have to worry about this for a while yet, so while the entirety of your sales income is yours, you cannot reclaim any input VAT on things you purchase (you can voluntarily register if you like, but for a new guy it's a fair bit of hassle, and if you're making a net profit, you're better off remaining unregistered).

Hope someone else can help you with the website stuff cos I can't!

im sorry, im kinda weak in english... so you are trying to say, im off better to pay my sourcer with VAT? is that right?

and can you please elaborate a little bit regarding this... hehe

but i do understand the entire idea of this... tnx

[mazzster]

A simple example:

Your supplier sells you 1 item for £80. He then has to charge VAT on top of that at 17.5%. This means you have to pay £94. You can then sell that item on for (amount chosen to ease calculations) £117.50, keeping (£117.50 - £94) £23.50 profit for yourself. The transactions are simple, you pay the supplier £94, customer pays you £117.50, and that is that.

If however you were VAT registered, you could reclaim the £14 charged by your supplier, so the net cost to you is only £80. However, when you sell the item on, you must add VAT to your price, so to make the same price to the end consumer of £117.50, your net price (ie price before adding on VAT at 17.5%) would have to be £100. You therefore now only make (£100 - £80) £20 profit.

It also adds some extra admin as you still pay the supplier £94, and still charge the customer £117.50, but you must register for VAT & fill in a VAT return showing output VAT (VAT charged on your sales) of £17.50, and input VAT (VAT you can recover from your purchases) of £14, meaning you have to pay over the difference (in this case £3.50) to HMRC.

Basically, unless you're gonna sell a lot of stuff (over £60k worth), I'd recommend NOT registering for VAT & simply pay any gross invoices as received, and make NO mention of VAT on any sales invoices to your customers.

Hope that helps?!

[drew_viii]

woah, now i get it.... tnx for the help mazzster

one more questions hehe... what do you mean dont mention vat on any sales invoices to my customer?

tnx again

[mazzster]

I mean given the above example your sales invoice would show net sales price £117.50, possibly + postage etc & that is it.

ie you would NOT show sales price £100 + VAT £17.50 = £117.50. Doing so would be illegal.

[shopfrontuk]

If you are not vat registered you cannot mention vat on the invoice.

all you do is give the customer the price per unit THEY are paying and nothing else

[drew_viii]

ok... tnx guys, so does anyone has the answer about the questions i first post on thie thread? especially on how people would believe that my site is legit and gain trust form them especially new sites... thank you

[drew_viii]

oh yeah, is it true that i couldnt post the link of my shop or site in ebay listings?