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bigduckontax, Accountant
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I have a company supplying ladies nail products to beauty

Resolved Question:

Hi my name is***** have a company supplying ladies nail products to beauty salons/ businesses only (not to the general public).
I would like to know if I should charge VAT on these and declare VAT as they are not like a nail varnish which is an end product, my products are ingredients in a process.
When I import them I get charged VAT on some but not all which is confusing?
There is also another company suppling the same as me and he does not charge for VAT and HMRC are aware.
Can you help clarify please.
Submitted: 9 months ago.
Category: Tax
Expert:  bigduckontax replied 9 months ago.

Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.

There is no requirement to register for VAT until the company's turnover exceeds 83K in any one year. Below that VAT can be ignored although it will have to be paid on products bought in or imported as the company is effectively the end user. Importation is always a problem as sometimes Customs will impose VAT and sometimes not, it is up to that Department. The products supplied by the company are standard rated so if the turnover threshold is breached then VAT will apply, registration necessary and full VAT accounting operated. Below the threshold there is no requirement to consult HMRC on VAT at all

I do hope that you have found my reply of assistance.

Customer: replied 9 months ago.
Hello Keith, thanks for your response. I understand what you say as I am already VAT registered as turnover exceeds limit, what I get confused with is how one company is paying VAT on these products (my company) and the other does not (and they are also VAT registered), obviously this puts me at a disadvantage commercially and HMRC know this.Is there a loophole he has found for not paying VAT do you think on the manicure powders?
Also if I do not get charge VAT on import does this mean I do not then have to charge VAT on the sale of the goods?thanks
Expert:  bigduckontax replied 9 months ago.

As you are already registered you must operate VAT on your sales and can reclaim all input tax paid on your quarterly return. All the big boys in this area of trade are charging VAT on sales of these standard rated products. It is possible that the other company is below the threshold, but you say it is registered. I would be inclined to ask HMRC why you have to pay VAT and the other company has not. That should put the cat amongst the pigeons, but not for you!

As far as I can see manicure powders are also a standard rated item.

bigduckontax, Accountant
Category: Tax
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Experience: FCCA FCMA CGMA ACIS
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Expert:  bigduckontax replied 9 months ago.

Delighted to have been of assistance.

Thank you for your support.

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