Ebay earning. VAT??

jw00081

i sell a few things on ebay, of which i bought in bulk of a website, i did not get a reciept for my purchase and so each item i sell on ebay has an estimated cost to me.

My question is this.

If the VAT man comes after me for tax am i going to have to prove how much each item cost me so that the correct vat can be caculated correctly?

Is there a limit before i have to start paying vat? i read somewhere it was £69,000.

ohmsoft

I thought the threashold was £61K but you may want to check with HMRC but as long as your way below that - VAT shouldn't be a problem.

Perhaps income tax is more relevant - if your regularly buying and selling at a profit HMRC could well see this as trading - in which case you should complete a self assesment to pay income tax.

Caroline73_2

Isn't VAT threshold based on turnover rather than profit? Income tax is based on profit not turnover,

tyllwyd

As far as I can see the current threshold is £67K. But that is for turnover, so (if I've understood it correctly) for VAT it doesn't matter what you bought the items for, if your total annual sales cross the threshold you must register for VAT.

But as the other poster said, if you are buying and selling as a sole trader, you need to be registered as self-employed and pay income tax/NI. When you are calculating your profit, you don't need to do it per item, but you do need to know how much you have paid out in expenses, and it is risky not to have proper records. Can't you go back and get some sort of a receipt for your purchases, or can you show what you paid through a bank account/PayPal records, something like that?

JasonLVC

tyllwyd wrote: »

As far as I can see the current threshold is £67K. But that is for turnover, so (if I've understood it correctly) for VAT it doesn't matter what you bought the items for, if your total annual sales cross the threshold you must register for VAT.

But as the other poster said, if you are buying and selling as a sole trader, you need to be registered as self-employed and pay income tax/NI. When you are calculating your profit, you don't need to do it per item, but you do need to know how much you have paid out in expenses, and it is risky not to have proper records. Can't you go back and get some sort of a receipt for your purchases, or can you show what you paid through a bank account/PayPal records, something like that?

Spot on. VAT threshold is currently £67k in any twelve month period (not annual or tax year, you count back 12 months from today and if turnover exceeds £67k you need to register for VAT).

You cannot charge VAT unless you are VAT registered and you can register voluntarily if turnoverr is less than £67k and it is compulsory if it is over £67k.