VAT claims - input vs output
Hello,
My business is growing slowly, I am not at the VAT threshold yet but I have a question about it.
As a small business, we source from UK distribution and need a help for VAT claims. Can we claim all VAT purchase invoices for paid VAT?
And once we register for VAT, Amazon will charge 20% for marketplace facilitator fee, which is VAT charged from customers.
In this scenerio, can we claim all VAT purchases or will be only input tax minus output tax, which will never be happen in my case. Because I will buy for £100 and sell for £200, just an example. Please help me with this a bit... Thanks
2 replies
Seller_QuM1AZgzfU9x4
If Amazon aren't already collecting the VAT as marketplace facilitator fees then they won't if you register for VAT. They only do that for non-UK established sellers.
Once registered for VAT you essentially add up all the VAT you pay on goods and services you buy and all the VAT you collect on sales and pay the difference to HMRC. Or ideally they pay you if you've paid more than you collected - which will largely depend on what you sell.
Seller_mS10UjVYuuGor
The best person to talk to is an accountant, in some circumstances you may even be better off registering before you are forced to.
VAT by its title is tax on the value you add (i.e. your profit). You'll charge your customers VAT which you need to pass onto HMRC but will offset all VAT you have paid on your inputs eg stock assuming it has VAT charged, the VAT on most postage/courier fees, the VAT on Amazon fees, basically the VAT you've paid on any legitimate business expense down to stationary.
As above, if you are a UK based business Amazon will not sumit VAT on your behalf, you'll rceive your disbursements as you do now and it is is your resonsibility to submit and pay VAT returns (usually quarterly). Returns need to be submitted electronically so you'll need a software package suck as quickbooks, xero or sage which you'd be well advised to have an accountant chack and submit for you.
