Up to how much can I sell things on ebay without paying VAT?

Inf0war

Hi,

I have just found a product which is importing certain health good from
Poland at relatively cheap price. However they want to charge me 22%
VAT on importing as an individual. They said that if I have EU
VAT number then they can issue a commercial invoice with 0% VAT.

But if am a VAT company then I have to pay 17.5 % VAT on all products
sold in UK.

The amount I want to import is for about £2000 and sell it in UK for
£2800 which would give 30% profit.


I would like to ask advice on the
following options:

1. is it worth it to pay the 22% VAT on import
or
2. incorporate company for about £40 and then dodge the 22% VAT and
pay 17.5% on all sold goods within UK.
or
3. I hear that no VAT can be charged within UK if one sells on ebay
for less than £8200 a year. Is this true?

or
4. is there another option

Thank YOu

cosmokramer2004

You could possibly ask the delivery company if they can provide a Polish address to ship from (PO). That would avoid taxes from the originating company - and depending on the size/value of your shipments you could avoid UK customs.

TBH that sounds pretty unlikely reading back.

I actually thought you had said Finland . Even so, lovely evening Good luck with that

soolin

I don't think you are going to get an easy answer here, VAT is extremely complicated and needs professional advice.

Vat status is on more than business registration, it depends on class of goods and turnover not just outgoings. It is entirely seperate to the Tax rates.

YOu might try asking your local VAT office, but they will probably just send you brochures.

Frankly though for such small amounts if might be better to remain a small trader as otherwise you will be paying an accountant to fill out VAT returns for you every quarter just to comply. Also it is swings and roundabouts, you buy VAT free but have to repay that VAT somewhere so would have to raise VAT invoices on your ebay auctins as of course without a fixed end price you can't know how much to charge your buyers in advance.

Incidentally, 30% profit before ebay charges is quite poor. Are you sure you can make a profit on this with or without VAT? Also, (and maybe others will correct me if I am wrong) your VAT status would not exempt you from certain other import duties, so make sure you work this out thoroughly before you go ahead, I am seriously worried about your profit margin.

Soo

mah_jong

Also have a look at the small buiness board.

100% profit is not unusal . Though turnover can is also a factor.

Have you done a proper plan, to cost it .... taking into account ebay fees, paypal, fees et al ?

criminal_smile

VAT registration is not required until you have a turnover which exceeds £56,000 pa. At this point, you MUST register for VAT, but can do so at any time prior to this anyway.
You do not need to register as a company with Companies House to do this. IMHO, it would be a waste of the £35.00 fee, as you may not survive. I would run for a while to ensure that the business was going to continue, and once you are sure, you could then think about registering. Remember you do not need to register as a sole trader. Might be worth you having a quick look at the small business board for more info as mah_jong said.