VAT Registration or Exemption

System
System Posts: 100,537 🤖 Admin 🤖
edited June 9 in General accounting discussion
Should a fishmonger selling to the general public be registered for VAT if he hits the threshold? I am assuming not because his supplies are exempt. Can anyone confirm please?

Comments

  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:VAT Registration or Exemption

    I printed this off the "VAT guide for beginners"
    What if all my goods are zero-rated?
    If you only supply goods that are zero rated, you may not have to register for VAT even if your taxable turnover goes above the registration threshold, but you do have to tell HMRC first and apply to be "exempt from registration"
    Best not assuming anything where HMRC are concerned :)

    Jan
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:VAT Registration or Exemption

    Hello,

    If somebody is selling exempt supplies then they cannot register for VAT.

    If they are selling a mix between VATable (that is 0%, 5% and 17.5%) and exempt supplies then they could be partially exempt, therefore can register for VAT apply the partial exemption rules

    Hope this helps

  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:VAT Registration or Exemption

    That's not strictly true.
    I worked for a food manaufacturing company who only sold exempt goods and was still VAT registered.

    It would be best to do as Jan suggested and contact HMRC for advice but remember to get a reference for your call in case there are problems in the future based on the advice they give.

    Regards
    Michelle
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:VAT Registration or Exemption

    Hi

    Just to add to the mix (particularly for the original post), zero rated and exempt are not the same thing and the implicatiosn of registration can be affected by such. In reality, few things are exempt and mosts things people consider exempt (i.e. children's clothes) are actually zero rated. Also, in some instances (again chidlren's clothes) it's not just the product that determines the VAT catagory but also the way it is sold or presented for sale.

    Neil
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:VAT Registration or Exemption

    A fishmonger surely would be selling zero rated items - ie there is VAT but at 0%. Therefore he would be obliged to register for VAT when he hits the threshold.

    Why not register from day one? He would be able to claim VAT back on his phone, electricity, stationery etc etc - ie all items he purchases that have VAT on them. The only reason for NOT doing so, would be if the cost of compliance would be greater than the VAT he is reclaiming.

    Claudia

  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:VAT Registration or Exemption


    My brother in law was a fishmonger and he was VAT registered.

    He had 3 vehicles doing the deliveries - so the VAT on their maintenance & fuel was pretty heft on its own.
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:VAT Registration or Exemption

    Hi,

    If you are only providing exempt supplies - that is ones that are not VATable at 0%,5%, 17.5%, you cannot register for VAT. There are some exceptions when it comes to EU rules. Exempt supplies are normally things like education, insurance etc.

    If you trade with a mix, you may be able to register and abide by the partial exemption rules.

    This is a quote from HMRC website:
    "If all your supplies are exempt, you will not be able to register for VAT"

    However, I think there has been some confusion over zero rated and exempt supplies on the above posts. Fishmongers are presumably zero rated?

    Kind Regards

    Kate
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:VAT Registration or Exemption

    Hi Kate,

    I presumed TC meant zero rated when I posted my reply, hopefully he/she will have contacted HMRC.

    Jan
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:VAT Registration or Exemption

    Thanks for all that advice. Some conflicting advice! I will contact HMRC, but I am sure that if the supplies are exempt (not zero-rated) then he cannot register for VAT. I will let you know.
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:VAT Registration or Exemption

    Hi TC

    Try looking at HMR&C leaflet 701/14 - think you will find fish is zero rated (unless not fit for human consumption :shock: )

    Jan
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:VAT Registration or Exemption

    Hi Jan - your :shock: is right. I have a client who has an angling shop, and all the skanky stuff that they sell as bait is all standard rated :shock: :shock:

    Claudia
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:VAT Registration or Exemption

    Have had a reply back from HMRC VAT regarding this and the fish sold is zero-rated, but it appears that registration is still compulsory if the taxable turnover goes over the threshold in any rolling 12 months. As such then, if he registers, surely he will be able to claim back VAT every quarter on motor expenses etc. Yes?
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:VAT Registration or Exemption

    Yes that's right - so it's likely he will get a VAT refund, as his VAT on fish sales will be zero.
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:VAT Registration or Exemption

    Thanks for your help.
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:VAT Registration or Exemption

    Just to let you know - this one is now all sorted. My client is registering for VAT - compulsory because he has hit the threshold. He could opt for exemption because all his supplies are zero-rated, but he is going for registration because he can then save VAT on his other expenses. Sorted in the end. Many thanks for all your help.

Categories

Privacy Policy