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VATABLE TURNOVER- quick question Thanks

(4 Posts)
jendot Fri 16-Sep-11 14:47:57

I am worried I may be sneaking close to the VAT threashold this year..I don't use an accountant and am a bit of an figures dummy!

I am online/ebay sole trader.

Say my gross turnover was £30k in the 1st 6 mnths of this year say £20k of that was sale of products 5k was postage paid 5k was ebay/ paypal fees.

Would my vatable turnover be my 30k gross turnover or is it the 20k 'product sales' (eg only the thing I sold which I pay vat on) turnover..

Apologies if its a stupid question..just trying to get my head round it!

(I know I SHOULD get an accountant, but as a new business I am making practically no profit yet..say £4k of that £30k is net profit... so can't justify anymore outgoings at the mo)

Thanks

corygal Fri 16-Sep-11 15:02:11

Hello there

Bleagh, VAT. But you don't need to worry yet; VAT threshold is 73k, and this fig only counts vatable turnover, so it's the 20k figure you need to consider (assuming that you don't pay VAT on stamps and fees.) Double that six-month figure to make a tax year, ie your VAT-able turnover for this financial year is 40k, which is miles off.

However....If you pay VAT on the goods you buy, but you don't charge it on what you re-sell sell, you can get your VAT back by voluntarily signing up & getting a VAT number. Ie make more money. A nice wheeze, but keep decent records.

When in doubt, you can call HMRC VAT line. Or use this handy site http://www.taxdonut.co.uk/tax/vat/vat-registration

mranchovy Fri 16-Sep-11 18:06:46

> so it's the 20k figure you need to consider

Er no, it's the £30k figure actually.

You will have to register once your turnover for the previous 12 months reaches £73k. I suggest you keep a spreadsheet with a rolling total to keep your eye on it.

Business Link is probably a better place to go for advice.

mranchovy Fri 16-Sep-11 18:12:30

Forgot to say.. it's probably a good idea to check that your business model still works when you have 16.7% knocked off your income - if you are paying VAT on your stock purchases that you can reclaim you may be OK.

Also the Freelancers topic here is often better/quicker than this more general forum for this sort of thing.

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