Starting own business - advice needed please!

alien123

I have just set up my own online shop too. The advertising is the problem. Anyway, let me get back to your question. To set up an online business, I first set up a company name at companyhouse (available online). I registered as an limited in case of bankrupcy or future law problems such as copyrights. I understood when PSP hasnt launched in UK and a lot ofUK sellers were selling them via ebay. One day, Sony took off all the listings and sue them all! Ebay and Sony worked together of course.

Next step is accepting payments through your shopping cart. You may choose to use paypal, easy to integrate but also easy to attract bad buyers which they can keep the money and the item you sent even with record eg. They do chargebacks and claim they have returned the stuff... (happened to me twice while they returned a recorded empty boxes and paypal will just return the money to them). Other way, is contact your bank and set up an internet merchant account to accept major cards payments such as visa, maestro, mastercard etc...and finally you just need a payment gateway which you can use protx, worldpay etc. to link your site payments to your bank account.

Good luck with your business and do let us know your site. Thanks

schneckster

No - you don't get £300 back - you offset it against the £391 VAT charged on your sales.

You're mindset is one of you offset the £300 in VAT against the VAT you pull in. Mine is one of it's £300 I haven't actually spent! Splitting hairs, maybe, but therein lies the difference and therein lies the reason why you cannot see the benefits and I can.

Non Vat registered:
£2300 out £3000. You would end up with £3000 in bank if start with £2300 £700 profit (3000-2300)

VAT registered:
1. start with £2300 in bank like you suggest (it makes no difference to end result)
2. spend £2300 on goods. Account balance = £0
3. sell goods for £3000. Account balance = £3000
4. Calculate VAT - outputs (on sales) £391
- inputs (on purchases) £300
Bill = £91
YOU DO NOT GET BACK ANOTHER £300 - you offset set it against the VAT charged on your sales.
5. You pay £91 you end up with £2909.
profit £609 (2909-2300)

I agree, we should draw a line under this as you are not reading what I post. Re-read my posts and you'll see I agree several times the profit is £609. Aside from you saying you don't get the £300 back (well, where did it go if not your bank account???) I agree with what's above, especially since I posted most of it myself, the other day.

I do think you're wrong. If you wish to not be VAT registered, that is entirely up to you. But I see the benefits to cashflow that you clearly do not. I saw the benefits when I did this for real, and not just on Excel. I saw that things were cheaper to buy and I saw the extra money in my bank account that helped me continue operating when non-registered colleagues were struggling to stay afloat.

It isn't for everyone and you need to check it out against your business model to see if it's worth doing. But for the original OP, I would say it is.

But as you say... line drawn under this now.

Schneckster