Originally Posted by
Paddy
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
And if you sell for £117.50 without vat, as soon as you become vat registered you will feel it sting in your pockets. A lot of business's i know have to absorb the costs or make a slight price increase to offset the costs.
A good accountant is worth there weight in gold when it comes to taxes. I can reccommend one who has got me out of the mess i got myself into if you want me to.