Hi, So my business will soon hit the VAT threshold and I will need to register for VAT. From what I have read I must do this within 30 days of reaching the threshold is this correct?
How do I work out what to charge? Most of my products are very low value £1 lines, so for example if I pay 60p for it (including vat) and sell for £1 – how much VAT will I be paying out of that? Do I still claim back the VAT paid in the first place (10p) ? I just need to know the final figure so I know how much profit I will be left with at the end of it?
Once you register for VAT, you will be given a VAT number and the date of start charging VAT.
Depending on the products you sell, the majority of products are usually standard rated – ie VAT charged at 20%.
You have to then VAT on all the affected sales even if one is £1, the total sale price would be £1.20. Generally, VAT registered businesses can also reclaim VAT paid on the goods and services they buy.
The net VAT from the sales and paid on your goods/services bought is that is paid to the VAT office usually on a quarterly basis.