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bigduckontax, Accountant
Category: Tax
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Question regarding VAT. I plan on starting an online store.

Customer Question

Question regarding VAT. I plan on starting an online store. Initially, to test out the waters and gain maximum growth before buying stock, I will simply be buying the products off Amazon and shipping directly from them.So for example, I sell a product on my website for £24.99 and then buy it from Amazon for £24.99 to have it shipped directly to the customers door.Am I right in thinking that if I get to the VAT threshold, I wouldn't be LOSING money to the VAT charges? As the amount I'd owe for VAT on each product sold, would be the same amount of VAT I'd be claiming back on the products purchased.
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.

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

Current VAT Registration Threshold is, as I am sure you are aware, 83K in any one year.

You buy from Amazon Debit VAT 4-17, and Cost of Sales 20-82. You sell to the customer Credit VAT 4-17, Sales 20-82. In accounting terms the answer is the proverbial lemon.

I do hope that I have been of assistance.