Self Employed + VAT

Alpesh2404

I will in the near future be registering myself as Self Employed.

I do reselling on eBay.

If i become VAT registered, i receive a VAT reg number. does this purely mean i can receive my VAT on all purchases? and how do i claim the VAT back?

thanx in advance

Murtle

It means all your sales will need to have VAT added on to them, which you then collect and pay the VAT man.

Have a look here

http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageVAT_Home

Alpesh2404

so does that mean if i sell an item for £200 on eBay, the good actually costs £170.21, and VAT is £29.79?

practically,

i buy an item for £150+VAT
i sell the item for £200+VAT

what part of the VAT do i get back and what part of the VAT do i need to give?

rjm2k1

IIRC You pay the vat man the difference between the vat you pay out and the vat you collect, so if you buy something and pay them £10 in vat, then sell it on collecting £25 in vat, you pay the vat man £15.

linlin_3

Registering for VAT means you can claim back any VAT on purchases only where they have been subjected to VAT (inputs)
When you sell, you will show the gross selling price (inc VAT), or as an ebay seller, the price you get will include the VAT. This VAT (outputs) you pay.
Certain items e.g. postage, are non-VATable, so when you pay for postage there are no inputs to claim. However, when you recharge your postage costs, or include postage in the selling price, it could be seen as part of the service you provide. You would probably need a VAT ruling on that point.
If you are buying and/or selling overseas, the rules can become very complex. Unless or until you reach the VAT threshold (currently £61000) registration could become a complicating, annoying factor for you.
If your turnover is likely to reach the threshold, monitor your sales closely as if you reach the threshold in any one quarter, VAT registration can be backdated - a situation you don't need to be in.

worrypants

If you think you might reach the threshold then consider going on the VAT flat rate scheme as this means you need not worry about looking at outputs/inputs etc it is very very easy and time saving and could save you money.

Have a look at the gov website for details it will tell you what percentage you will need to pay for your type of business and you get 1% off in your first year of trading.

good luck