Anyone understand VAT? - SV650.org

Adam Ef · 27-03-16, 10:26 AM

Keeping it brief.. I have someone in a workshop next to mine that is prepared to do me a favour and get me some tools on an account at trade price, theory being he will get the VAT. But as far as I understand he won't actually keep the VAT.. it gets passed on through him?

Luckypants · 27-03-16, 12:04 PM

Sounds like he will buy the tools and reclaim the VAT on purchase. All good. He will sell the tools to you unofficially and not charge you VAT for them. Not good, this constitutes VAT fraud.

It's the only way I can see that 'he gets the VAT' but I have not dealt with VAT for some time.

Adam Ef · 27-03-16, 12:13 PM

He's not selling unofficially to me as I will have a receipt as I need it for my business. As far as I know he doesn't pay the VAT at source as he's VAT registered buying from a VAT registered distributor. Or does he pay VAT up front to reclaim?

I don't think he'll actually see anything out of it?

Mr Speirs · 27-03-16, 12:14 PM

We won't keep the VAT. He'll have to pay it but will get it back. He's not gaining anything out of it.

Unless he's flat rate VAT and the tools are over £2k total...in which case he'll get to keep some of it.

Adam Ef · 27-03-16, 12:15 PM

When I buy from places online for motorbike and cycling stuff or electronics / DVDs from companies that don't pay VAT due to where they're based, eg. Chain Reaction Cycles or Sports Bike Shop or Play.com how does that differ and not become VAT fraud? Or is it the same thing but just a matter of how it's done and called something else?

Adam Ef · 27-03-16, 12:16 PM

Quote:

Originally Posted by Mr Speirs

We won't keep the VAT. He'll have to pay it but will get it back. He's not gaining anything out of it.

Unless he's flat rate VAT and the tools are over £2k total...in which case he'll get to keep some of it.

Cheers, that's what I understood. I think he's misunderstood the situation.

Mr Speirs · 27-03-16, 12:16 PM

Ah right. If he's selling to you officially and he's VAT registered he has to charge VAT to you also.

As far as I can tell all he's doing is getting you the trade rate. I think he's just complicated things for you by mentioning VAT.

Adam Ef · 27-03-16, 03:43 PM

Quote:

Originally Posted by Mr Speirs

Ah right. If he's selling to you officially and he's VAT registered he has to charge VAT to you also.

That's what I was wondering. If he has to add VAT as well as paying it getting it in then the price goes over what they're available for online. If I had the trade account myself it would also mean I'd be paying more to get it from the distibutor than online. Really don't understand how online places are selling items cheaper than trade.

Mr Speirs · 27-03-16, 05:49 PM

Trade shops still make a profit from trade prices. The online shops are just willing to take that margin too.

27-03-16, 05:54 PM

If you pay vat as a business, you have to charge it too.
If I was you, get you're own tools, put them through your business as you would anything else, if you pay a little more, it just comes off your earnings anyway so you'll pay 20% less on the difference if that makes sense?

27-03-16, 10:26 AM	#1
Adam Ef Member Mega Poster Join Date: Dec 2015 Location: Bristol Posts: 1,200	Anyone understand VAT? Keeping it brief.. I have someone in a workshop next to mine that is prepared to do me a favour and get me some tools on an account at trade price, theory being he will get the VAT. But as far as I understand he won't actually keep the VAT.. it gets passed on through him?

27-03-16, 12:04 PM	#2
Luckypants Moderator Mega Poster Join Date: Jul 2003 Location: Nr Ruthin Posts: 7,056	Re: Anyone understand VAT? Sounds like he will buy the tools and reclaim the VAT on purchase. All good. He will sell the tools to you unofficially and not charge you VAT for them. Not good, this constitutes VAT fraud. It's the only way I can see that 'he gets the VAT' but I have not dealt with VAT for some time. __________________ "Your Viffer sounds like it is raising hell! Spot on." - Witchery 17/4/08 Snow Plough Appreciation Society - Member #3

27-03-16, 12:13 PM	#3
Adam Ef Member Mega Poster Join Date: Dec 2015 Location: Bristol Posts: 1,200	Re: Anyone understand VAT? He's not selling unofficially to me as I will have a receipt as I need it for my business. As far as I know he doesn't pay the VAT at source as he's VAT registered buying from a VAT registered distributor. Or does he pay VAT up front to reclaim? I don't think he'll actually see anything out of it?

27-03-16, 12:14 PM	#4
Mr Speirs Member Mega Poster Join Date: Jul 2008 Location: Northampton Posts: 2,218	Re: Anyone understand VAT? We won't keep the VAT. He'll have to pay it but will get it back. He's not gaining anything out of it. Unless he's flat rate VAT and the tools are over £2k total...in which case he'll get to keep some of it. __________________ Smokey Black Burnty 02 - Racetech Smoulderlators + .90kg BBQ Springs, zx10r shockingly toasted, Conti Road Attacks heat up very nicely, R&G Crash Bungs but what f**king use are they, No Colour Matched Hugger, Flame Extenda, Beowulf Titainium Oval Flame Thrower.

27-03-16, 12:15 PM	#5
Adam Ef Member Mega Poster Join Date: Dec 2015 Location: Bristol Posts: 1,200	Re: Anyone understand VAT? When I buy from places online for motorbike and cycling stuff or electronics / DVDs from companies that don't pay VAT due to where they're based, eg. Chain Reaction Cycles or Sports Bike Shop or Play.com how does that differ and not become VAT fraud? Or is it the same thing but just a matter of how it's done and called something else? Last edited by Adam Ef; 27-03-16 at 12:16 PM.

27-03-16, 12:16 PM	#7
Mr Speirs Member Mega Poster Join Date: Jul 2008 Location: Northampton Posts: 2,218	Re: Anyone understand VAT? Ah right. If he's selling to you officially and he's VAT registered he has to charge VAT to you also. As far as I can tell all he's doing is getting you the trade rate. I think he's just complicated things for you by mentioning VAT. __________________ Smokey Black Burnty 02 - Racetech Smoulderlators + .90kg BBQ Springs, zx10r shockingly toasted, Conti Road Attacks heat up very nicely, R&G Crash Bungs but what f**king use are they, No Colour Matched Hugger, Flame Extenda, Beowulf Titainium Oval Flame Thrower.

27-03-16, 05:49 PM	#9
Mr Speirs Member Mega Poster Join Date: Jul 2008 Location: Northampton Posts: 2,218	Re: Anyone understand VAT? Trade shops still make a profit from trade prices. The online shops are just willing to take that margin too. __________________ Smokey Black Burnty 02 - Racetech Smoulderlators + .90kg BBQ Springs, zx10r shockingly toasted, Conti Road Attacks heat up very nicely, R&G Crash Bungs but what f**king use are they, No Colour Matched Hugger, Flame Extenda, Beowulf Titainium Oval Flame Thrower.

27-03-16, 05:54 PM	#10
Specialone Guest Posts: n/a	Re: Anyone understand VAT? If you pay vat as a business, you have to charge it too. If I was you, get you're own tools, put them through your business as you would anything else, if you pay a little more, it just comes off your earnings anyway so you'll pay 20% less on the difference if that makes sense?

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