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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4207
Experience:  FCCA FCMA CGMA ACIS
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vat return first time

Customer Question

vat return first time

i am heading for the 82K thresh hold and would like to know the following.

will i be required to pay the full 12 months VAT immediately?

how can i interpret the 'tax point' with the way i sell my goods?

does HMRC require me to send all the purchase/ sale receipts?

can i deduct the VAT of my running costs if the provider charges VAT?

Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I'm Keith and happy to help you with your question.
You should, indeed must, register for VAT.
You will only have to account for VAT from the date of registration, so son't worry about the previous year.
HMRC do not need to see any supporting paper work save the VAT 100 quarterly return you file on line. Of course you must retain supporting evidence of your activities in the event of a possible VAT inspection of your business or indeed a query as to your profit level from the same department
You can reclaim any VAT paid to providers in the course of your trading. You do this quarterly too on the VAT 100.
I cannot respond to your query about 'tax point. without further information about your method of trading.
I do hope that I have been able to clear the air for you somewhat.
Customer: replied 2 years ago.

thanks,

with regards ***** ***** tax point.

my trade is buying and selling event tickets online.

i may 'sell' a ticket as soon as i have secured them (this means we are bound to the transaction but the money is held by the third party agent). but i may not receive the physical tickets till months later. at which point i will send them to the buyer. i do not receive payment from the third party agent until a few days after the buyer has received them and the buyer is happy. this is the point the sale is completed by the third party agent.

so, what is the tax point?

1. point of sale

2. date sent.

3. date payment received (sale completed)

also, to be sure i register at the correct point. can i deduct losses from my turnover? for example;

If i have 85K in sales, but have received 7K in penalties and fines (deducted from my sales by third party vendor for failure to supply tickets) resulting in me only receiving 78K. Is this my turnover? or is it still 85K?

with thanks

Expert:  bigduckontax replied 2 years ago.
Assuming that you annual turnover does not exceed 1.35 million quid you can use the cash accounting scheme. In basic terms you only record output tax when you receive payment. Full details can be found here:
https://www.gov.uk/vat-cash-accounting-scheme/eligibility
In the instance you quote, assuming you adopt cash accounting, you would post 78K to your turnover.
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Customer: replied 2 years ago.

thanks,

what about my tax point question?

Expert:  bigduckontax replied 2 years ago.
If you adopt cash accounting as I have suggested then the tax point is when you receive your money.
bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 2 years ago.
Thank you for your support.
I have always used cash accounting on VAT accounts I have maintained; it is much simpler.