Originally Posted by
dannyblackpool
so if i just sold as you put i will be worse off being vat reg
Not Vat Reg = sold for £117.50 = 105.75 profit (117.50-11.75)
Reg = sold for £117.50 = £98.69 profit (117.50 -10.00 - 17.5%)
in effect that sale being vat reg cost me £7.06?
Not quite.
If you ARE VAT registered, buy for £10, sell for £100 [both figures plus VAT].
You will basically pay the £17.50 MINUS the £1.75 you paid out on purchase, so you'd pay £15.75 in VAT [get an accountant lol]. So profit [all things being equal] is £91.75.
You CANNOT charge VAT unless you're VAT registered, so if you can sell for £117.50 without charging it, do it that way but you're right, it's a swizz. As are all taxes
A lot of small businesses I know steer away from the threshold that requires you to go over to being VAT registered. It's not possible with what I do but some smaller businesses actually start up seperate companies to avoid paying it -or rather to avoid all the issues that arise [all quite legally].
It's a pain in the arse and as said above, get an accountant as a good one will save you more than you pay them!!!!