What exactly can i claim back when i start my vat?
discussion. What exactly can i claim back when i start claiming vat? I know that its 20% off each item sold that i can then claim back from hmrc but is there others i can claim?
Can i claim the fee/tax charged by Fulfilment by amazon?
The selling on amazon fees?
Just trying to get my head around what i can actually recoup before i do?
Thanks
22 replies
Seller_ZVAz3d5lZuGid
I am not VAT registered, but presumably you can claim back everything that you have paid VAT on, and yes, that would be fees etc. A quick google will tell you, and HMRC site, I would think. You need to get this right.
Seller_76AUwmqvSyRIM
”I know that its 20% off each item sold that i can then claim back from hmrc”
If only!
You pay 1/6 of the price to hmrc, you do not claim it back.
You can claim on purchases, not sales.
Seller_mS10UjVYuuGor
Wrong way round, you pay HMRC 20% of the value of your sales and reclaim the VAT you have paid on your inputs e.g. stock, raw materials, Amazon fees, some forms of postage (not all), some advertising (not all) packaging etc etc.
You are taxed on the value that you add hence the term value added tax.
You need to file quarterly returns digitally so will need a software package such as Xero, Quickbooks or Sage and unless you understand it completely it is highly adviseable to have an accountant look over it before submitting and much easier if you let your accountant have eyes on it at all times.
Assuming you are UK based you must register for VAT at the point your company reaches £90k turnover in a single tax year, below £90k registration is optional but can be beneficial to some companies.
Seller_k2X0L9mVRT0pW
please get an accountant- you have this totally wrong. It’s very important to get this right from the beginning as penalties for mistakes are huge.
Seller_Uo7DjOjHQDtfz
All business expenses that include VAT.
Seller_40ozsHlGqPuEL
Are you UK VAT reg. in the first place?
Seller_DfMOm9tgJKAex
you can NOT claim back anything from what you SELL. you PAY 20% of your sales to HMRC
what you CAN claim is the VAT you are charges on you PURCHASES, ie the stock you buy if you have paid VAT on it and have the receipt/invoice then you can claim that back.. along with the VAT you pay on you expenses like phone bills, tools, stationary
but in general, if you are making a profit you will end up PAYING the hmrc
Seller_afGpzNBJac6CP
@Seller_evYvp3zn7Ix93
I'm not an expert on this. However there are couple of things to consider.
First and foremost work out your margins and adjust your pricing as registering for VAT will affect them
a) You'll be able to claim back VAT on referral fees, FBA fees, postage fees, advertising fees. However you'll pay VAT on your sales so your margin will decrease as price is the biggest item among those (assuming you're not selling on loss).
b) You'll claim back the VAT on inventory purchases you made up to 6 months that are still in the inventory (not sold). The ones you bought and sold will not be eligible so you'll need to have extensive records of what you've bought and what you've sold so far.
Going forward you'll be able to claim VAT on all inventory purchases and service invoices (external tools etc.).
Ask an accountant whether you'll be able to claim back VAT on PPE purchases.
Your new margin calculation should look like
(Sales Price/1.2) - FBA Fees (or postage fees) - Referral Fees - Inventory Fees - your overhead allocations
When an item is sold regardless of the platform there are 3 parties involved. You, customer and the state. So when calculating your margin make sure to strip out the state element.
I hope this helps.
Seller_tqjTDBPtoCKCy
You cant claim 20% back on sales but you can claim any vat paid to buy the goods.
Seller_ngBNR1oaQIhlr
Before you take anyone's advice, which VAT scheme have you enrolled on?
