Vat for sole trader please help
Hi, on the revenue estimate calculator there is an option for vat at 20%
I am not currently VAT registered so do I set this to 0%? or do I still have to pay this 20%?
Thanks
Seller_7VbclcPFFRTnc
No, if you’re VAT registered you don’t pay vat on the selling fees
You do though collect vat on the sale and pay it to hmrc
25 replies
Seller_7VbclcPFFRTnc
On the revenue calculator you don’t pay anything, it’s just a tool to help you work out your estimated profit
Seller_ToGF3z5ANjxZY
yes I understand that,
but when working out if an item is profitable do I set this to 20% or 0%:? as I am not vat registered currently
thanks of you reply
Seller_ToGF3z5ANjxZY
sorry I’m so confused,
so I buy a product for £80 and sell for 100
amazon charge approx £8
so I don’t pay 20% on the 100 just the 8?
so id pay 1.60 vat?
Seller_ToGF3z5ANjxZY
ok and is this even after I show them VAT exemption paperwork
Seller_ToGF3z5ANjxZY
basically I’m a sole trader with a turnover less than 85,000.
I want to buy a product and sell it
product cost 10
sells for 26
Amazon fees
£4.73
Fulfilment cost
£3.12
Storage cost
£2.80
10.65 total fees plus 20% vat?
or does 20% of the £26 (once product sold) go to amazon?
Seller_ToGF3z5ANjxZY
right I’m with you thanks,
and you pay the vat regardless of being vat registered or not?
Seller_sA2gglkdQhuPv
You just pay the 20% on whatever you are buying to sell. Once you are VAT registered you will pay 20% on the SALE price but then claim back the VAT you spent purchasing the goods. This is only compulsory after you do 85000 in revenue within a year. Also you could claim back the VAT on Amazon fees which Amazon help you do, if/when you become registered. For now don’t worry
