VAT Customs question...sorry, boring

[Novascotia33]

I've just become VAT registered, I'm hoping I can do flat rate, but waiting for approval. However I think my turnover will be above flat rate threshold as the year progresses anyway, so need to consider what 20% would look like.

My question is, i import a lot materials from non EU countries to create my products, is the Customs I pay on all these imports treated like VAT? is it deductible? Lady at hmrc seemed to suggest so on the phone, but then i've been on the website and it's all a bit vague.

Any help from you lovely accountancy people much appreciated.

I don't think that customs duty is VAT but I could be wrong. I've been looking at something similar for a client who imports materials and is on flat rate

I think you're right, I just watched this, she makes it pretty clear

Who are you selling your products to? If it is to individuals or businesses or charities that cannot claim VAT you would probably have been better off waiting until you have to register. Too late now though.

You pay VAT as well as customs duty on imports. The VAT can be reclaimed in the normal way (but if you are on a flat rate scheme you don't reclaim VAT), but you cannot reclaim the duty.

Hi MrAnchovy, thank you. Not sure what you meant, 'wait until you have to register' I do have to register? Once over 77k turnover everyone does right? but flat rate turnover only allowed up until 150k so you could do half the year flat rate and half the year at 20%, is that right. They still haven't come back to me to say if I am allowed to register for flat rate yet though.

Yes can see now that vat is not customs, but that there is vat on customs iykwim.

Are you saying that your turnover for the last 12 months was over £77k (from April the threshold is actually £79k)?

Why do you believe that the Flat Rate scheme would be beneficial to you?

You need an accountant.

Hi Anchovy, yes i probably do need an accountant.

Yes my turnover is over 77k (and 79k) so I had to register. I'm not 100% sure which is best flat rate or standard, but my flat rate category (if it's approved, and with the 1% break for the 1st year would be 6.5%) seems quite reasonable.

I think flat rate would be best for me because I import almost all of my raw materials, so there is no vat on them, my land lord is not vat registered, so no vat on the rent, there's no vat on the postage, and those are my 3 largest expenses.

Anyway, I expect my turnover might tip over the 150k flat rate turnover threshold later in the year, so I'll have to do standard anyway.

I called them today to see if my flat rate was approved and they told me the flat rate scheme is on strike (FFS!), and there is a huge back log, so I should go ahead and do my first months at 20% and then if I'm approved for flat rate I can make a correction.

flat rate team, on strike I meant, to say, sorry.

Have you found an accountant to help you? It may be worth finding one to help you get things in hand, then let you do your own returns.