Where to tick on VAT registration zero rate? 12 June at 10:06AM in Small Biz & Charities' MoneySaving 7 replies 50 views

Poshsalt

Hi,

Im filling out the VAT registeration form and the products I sell are zero rate.

But cant find on teh VAT registration form where to tick the rate I should pay.

Can anyone let me know, I would call but its Sat.

martindow

It's a long time since I registered for VAT so please don't take this as gospel.  I don't think you are asked what you are selling or what rates of VAT are liable at that stage.  You are just asking for a VAT number and the VAT payable or not will be entered into your returns based on your accounts.  Cn you continue from where you are in the application to get a VAT number?

There is also a difference between zero-rated and exempt items.  From the customer's point of view they are the same as (s)he paysno VAT but traders of exempt products cannot reclaim VAT paid on the expenses involved selling them.

Please don't take my word for it though and ask an accountant or HMRC.

Poshsalt

martindow said:

It's a long time since I registered for VAT so please don't take this as gospel.  I don't think you are asked what you are selling or what rates of VAT are liable at that stage.  You are just asking for a VAT number and the VAT payable or not will be entered into your returns based on your accounts.  Cn you continue from where you are in the application to get a VAT number?

There is also a difference between zero-rated and exempt items.  From the customer's point of view they are the same as (s)he paysno VAT but traders of exempt products cannot reclaim VAT paid on the expenses involved selling them.

Please don't take my word for it though and ask an accountant or HMRC.

Ive got an item that we manufacture that says zero rate, so I'd presume we can claim back the VAT on stamps and packaging.

Sandtree

You simply register for VAT, it covers you selling zero, reduced, standard and exempt items. The level of VAT on your supplies and products simply varies how you complete your returns.

Poshsalt said:

martindow said:

It's a long time since I registered for VAT so please don't take this as gospel.  I don't think you are asked what you are selling or what rates of VAT are liable at that stage.  You are just asking for a VAT number and the VAT payable or not will be entered into your returns based on your accounts.  Cn you continue from where you are in the application to get a VAT number?

There is also a difference between zero-rated and exempt items.  From the customer's point of view they are the same as (s)he paysno VAT but traders of exempt products cannot reclaim VAT paid on the expenses involved selling them.

Please don't take my word for it though and ask an accountant or HMRC.

Ive got an item that we manufacture that says zero rate, so I'd presume we can claim back the VAT on stamps and packaging.

Stamps are VAT Exempt and so no VAT to reclaim.

The raw materials your using to manufacture your products are more likely the main source of VAT to be recovered (assuming your suppliers are VAT registered)

Poshsalt

Thanks

Im a bit lost on the form, on page 8 number 17 says turnover.

Estimate your taxable supplies in 12 months.

Estimate your zero rate supplies in 12 months.

If I've done 100k in sales with a product zero rate, that would go under zero rate right?

So then taxable would be £0?

Sandtree

Obviously you should get professional advice

You have to remember that goods at 0% rate VAT are taxed, just at 0%. Exempt goods are the only ones that are untaxed.

So your total taxable sales is your total turnover of goods that attract VAT be it at 0%, reduced rate or standard rate.
The next box down will be the total taxable sales that are 0%. So if you only sell 0% rated goods then both numbers would be the same.

Poshsalt

Sandtree said:

Obviously you should get professional advice

You have to remember that goods at 0% rate VAT are taxed, just at 0%. Exempt goods are the only ones that are untaxed.

So your total taxable sales is your total turnover of goods that attract VAT be it at 0%, reduced rate or standard rate.
The next box down will be the total taxable sales that are 0%. So if you only sell 0% rated goods then both numbers would be the same.

I've hired an accountant but they have put taxable as £80k and zero rate as £20k, so Im was wondering if that was correct. Id have thought if im selling zero rate it would be £100k under zero rate you see.

Thanks for you help.

martindow

I've just noticed your user name Poshsalt.  If this relates to your business, products like Himalayan pink salt sold to be used in baths for instance will attract standard VAT as it is not for culinary use.  Could this explain your accountant's figures?