Have I made a terrible mistake??

dprovan

Hi

I have a full time job and registered as self employed for items I was selling on ebay. I fear that I have been quite laxed and made a big mistake. I have kept a record of purchases sales expenses etc and having sat and collated this I am worried that I have went above the VAT threshold of £61000.

These are rough calculations:
from April07/April 08

My purchases of stock = approx £58,521.39
my sales = £57,107.70
my fees/expenses are £7471.28 (this includes ebay fees, paypal fees, postage and purchase of a laptop).

and I have a remaining stock at 1st April of approx £11,000.

My panic is concerned with this remaining stock. I am not sure how my VAT turnover is calculated. Is it my total purchases? Or is it my sales + remaining stock. If it is the latter I am over the £61000 quota and if so I fear this is bad news.....

If I am over the quota what does this mean??

I had been advised previously that as my business only involved buying an item and selling the same with no other overheads that I wouldn't need an accountant to do my books, I am not sure now seeing this. Any views/expertise would be appreciated as I am beginning to panic as money is tight enough without any more big bills?

Elaine_Wilson

You don't need to worry.

Your turnover is just the gross sales you made (that is, before Ebay's fees are deducted). So you are still in the clear at the moment.

Don't forget that you should check your turnover at the end of every month, not just the end of the tax year.

dprovan

thank you so much Elaine I was panicking there...

For some reason I don't have a thank you button available to thank you for some reason

so thank you

meester

You probably don't want to start charging VAT.

It doesn't sound that your business is particularly lucrative as it is, so VAT's not going to improve your margins.

What are you selling? Some items are zero-rated.

Also if you are VAT-registered, you can reclaim input VAT, which softens the blow quite a bit.

You are required to register if your vatable sales have gone over the threshold in any 12-month (to the end of each month) period exceed the threshold.

At the moment, your sales are £57.1k. So you have a fair bit to go before you reach £64k (the current limit).