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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15838
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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My name is***** am an architect working for

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Hi, My name is***** am an architect working for a big architecture firm and I am making 27.700 GPB a year from which I pay tax just over 400 GBP a month from my monthly income. I live just outside East London. I want to open my own online store where I will sell jewelry from London worldwide! I have now come to the issue where I have to deal with the tax problems. I have designed a ring that I will sell with 120 GBP online. I have to complete the tax section on the website so apparently I need to fill in Country codes, rates(in %) and tax name. So how much tax do I pay if I sell a ring that costs 120 GBP? Where can I find the rates? Is there a list somewhere I can download? What If I sell products that cost more or less that 120 GBP? I would need a clear answer to help me start with my start-up business so that I can sell more and more in the future. Thank you!
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi. Which tax section on which website are you referring to exactly?
Customer: replied 1 year ago.
So my website is www.lasso.one and there you can see the ring and I want to start selling with 120 GBP. When the buyer makes the purchase online I need to Show the price with and without tax! I don't know how to do that. Can you help? Thank you
Expert:  TonyTax replied 1 year ago.
Hi.
Let me take a look and I'll get back to you.
Customer: replied 1 year ago.
Ok. Thank you!
Expert:  TonyTax replied 1 year ago.
Hi again.
Assuming you are not VAT registered, you would not charge VAT to your customers. If you were VAT registered, the rate of VAT would be 20%% so on £120, the VAT would be £24.00. On 3100, it would be £20. Even if you were VAT registered, you would not charge VAT to customers outside the European Union or the European Economic Area. A list of the EU and EEA countries is here:
https://www.gov.uk/eu-eea
You don't need to register for VAT until your turnover (sales) exceeds £82,000 or will do in the next 30 days. Take a look here for more information:
https://www.gov.uk/vat-registration/overview
If and when you do register for VAT, the lists of country codes here will be useful:
https://www.gov.uk/guidance/vat-eu-country-codes-vat-numbers-and-vat-in-other-languages
http://www.inniaccounts.co.uk/faq/list-of-ec-countries-and-territories-for-vat/
The UK code is GB
I hope this helps but let me know if you have any further questions.
Expert:  TonyTax replied 1 year ago.
I've reposted the first sentence of my answer here;
Assuming you are not VAT registered, you would not charge VAT to your customers. If you were VAT registered, the rate of VAT would be 20% so on £120, the VAT would be £24.00. On £100, it would be £20.
Customer: replied 1 year ago.
Thank you. No I am not yet registered for VAT so have no VAT number at the moment. However , I want to register the company name so I assume they will me a VAT no. So, what i understand is that until I make 82 000 GBP I don't have to pay any VAT. But if I get a VAT no before that happens I will pay 20% tax from the amount I will be selling. Is that all correct? Thanks a lot!
Expert:  TonyTax replied 1 year ago.
Even a limited company doesn't have to be registered for VAT until its turnover exceeds £82,000 as you will read here:
http://www.companybug.com/register-for-vat/
http://www.sjdaccountancy.com/about/vat_basics.html
Not being VAT registered can make your goods cheaper than those of a VAT registered business. However, if you aren't VAT registered, you cannot recover VAT you pay to your suppliers. You simply claim the VAT inclusive cost as an expense.
If you are VAT registered, you charge your customers VAT where applicable and pay VAT to your supplier where applicable. You offset the VAT you charge (1) against the VAT you pay (2) and if 1 is more than 2, you pay the difference to HMRC and if 2 is more than 1, you get some VAT back from HMRC.
What you need to do is assess how much VAT you will pay your suppliers and compare that to the VAT you would charge if you were registered and consider what being registered will do to your market competitiveness. Many new business owners will see how they get on in their new business before registering for VAT voluntarily.
Customer: replied 1 year ago.
Now it is all clear. So VAT can wait a bit. Thanks a lot!
Expert:  TonyTax replied 1 year ago.
That's the way I would so it. There are enough compliance issues to deal with without volunteering for more!
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15838
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
TonyTax and 3 other Tax Specialists are ready to help you
Customer: replied 1 year ago.
I wanted to make sure what I do is legal and I will no trouble whatsoever with HMRC. I will get back to you after I make more than 82 000 GBP ;). Thank you very much and have a great evening :)

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