VAT and change of business

System
System Posts: 100,537 🤖 Admin 🤖
edited June 9 in General accounting discussion
Hi there everyone

I have got a VAT registered client who used to just sell furniture and now sells (very little) furniture but sells (quite a lot) of double glazing et al for Everest.

Do I need to inform VAT office of change of use? I tried to once for a client who gave up her shop and just sold things over the internet, and they weren't interested :? Will they more interested this time?

Also, he also sells the finance for pay for the double glazing which is exempt. He is maintaining from talking to other salesmen that all purchase VAT is reclaimable because without selling the VATable items he would not be selling the exempt item - fair do's BUT

surely he cant claim everything back.

Any thoughts or even better previous experiences would be much appreciated. :lol:

Claudia

Comments

  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:VAT and change of business

    don't know about whether you should notify the change or not (but there's no harm in sending a letter to make sure is there?), but I do have some notes from ATT on accounting for VAT when you're selling some std rated and some exempt supplies. If you let me know your email address I'll scan it in & email you, rather than trying to type it all out, & I've never had to do it in real life so wouldn't want to try summarise it for you!

    it looks quite complicated with different 'methods' to use in different circumstances. rather you than me!
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:VAT and change of business

    Thanks Jodie - you're a star.

    My email address is:

    claudia.lowe@btinternet.com

  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:VAT and change of business

    I would say that you won't need to inform customs of change of use because it will be the individual that is registered.


    "He is maintaining from talking to other salesmen that all purchase VAT is reclaimable because without selling the VATable items he would not be selling the exempt item"

    That would be correct but don't forget all his OUTPUT TAX will come from the sale of the window, so I would say that he isn't going to gain. Will he meet the threshold whilst selling windows?

    I would deregister all together :? unless he likes doing paper work and paying VAT :lol:

    Regards

    Dean
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:VAT and change of business

    Hi Dean

    Everest have quite a clever system (for the salesman) whereby they are paid commission of say £1,000. If you are NOT VAT registered end of story.

    If you ARE registered, then you fax your VAT return every 1/4 to them and they fax it back with boxes 1 and 6 completed (£175.00 and £1000) and then they send you a cheque for £175.00 ie amount in box 1!!!!! :lol:

    I do fuel scale charge, claim back all fuel and other little odds and sods and one happy salesman :) as he gets cheque for £175.00 but only pays over say £75.00 to HMRC.

    As an afterthought as he is taking the piss with me today - what do you guys do about subsistence? DOes the 13 miles from place of "work" still apply? Or is it only food when involving an overnight stay?

    Claudia
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:VAT and change of business

    Can you show me a monthly/quaterly comparison between a non-registered and registered...

    What is his employement status surely he's an employee?

    Feel free to PM me if you wish.

    Regards

    Dean

    p.s you can have some real battles with subsitance... what exactly is he asking you?
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:VAT and change of business

    OK Dean here goes - I think what I am saying is right - I have sort of guessed at some of the figures:

    VAT Registered:

    Commission: £13,000
    VAT from Co: £ 2,275

    Total Income = £15,275

    Purchases: £8,000 (net)
    VAT owing: £ 875 (2,275 - 1,400)

    Net profit = £6,400

    Not VAT Registered:

    Commission: £13,000
    Purchases: £ 9,400

    Net profit = £3,600

    Better off to the tune of £2,800.

    Please someone tell me if I have missed something blindingly obvious :oops:

    Claudia
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:VAT and change of business

    hmmm I'll have a think on this one.... seems to good to be true.

    I certainly would like to know how they can say that he is S/E!

    Regards

    Dean
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:VAT and change of business

    Dean - will reply to your PM instead.

    Claudia

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