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VAT question

 
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Barefoot Andrew
Downsizer Moderator


Joined: 21 Mar 2007
Posts: 22780
Location: In the 17th century
PostPosted: Tue Dec 08, 09 1:51 pm    Post subject: VAT question  Reply with quote    

I bought some software from Adobe's online shop over the weekend. Legally this is sourced form Ireland and thus VAT is charged at 21.5%.

Declaring this as being separate from normal UK VAT seems straight forward on the VAT return. So I'm clear to assume the full 21.5% is mine to claim back?

A.

judith



Joined: 16 Dec 2004
Posts: 22789
Location: Montgomeryshire
PostPosted: Tue Dec 08, 09 1:52 pm    Post subject: Reply with quote    

There is a special process for claiming it back, but what you should have done is give them your VAT number and then they should have charged you zero VAT on the purchase.

Barefoot Andrew
Downsizer Moderator


Joined: 21 Mar 2007
Posts: 22780
Location: In the 17th century
PostPosted: Tue Dec 08, 09 1:55 pm    Post subject: Reply with quote    

Bugrit
A.

judith



Joined: 16 Dec 2004
Posts: 22789
Location: Montgomeryshire
PostPosted: Tue Dec 08, 09 2:00 pm    Post subject: Reply with quote    

Probably worth a call to your VAT office.

Helen_A



Joined: 26 Jan 2005
Posts: 1548
Location: MK, Bucks.
PostPosted: Tue Dec 08, 09 5:08 pm    Post subject: Reply with quote    

you should get an EC sales reclaim return to do once a quarter, you do it on that

Cathryn



Joined: 16 Jul 2005
Posts: 19830
Location: Ceredigion
PostPosted: Tue Dec 08, 09 5:11 pm    Post subject: Reply with quote    

You see, this is what happens when you go ahead and use your own initiative without checking on here first.

Chez



Joined: 13 Aug 2006
Posts: 35907
Location: The Hive of the Uberbee, Quantock Hills, Somerset
PostPosted: Tue Dec 08, 09 5:13 pm    Post subject: Reply with quote    

Talking of VAT, if one is VAT registered, is it better to buy stuff now, or in January? Does it make any difference?

Barefoot Andrew
Downsizer Moderator


Joined: 21 Mar 2007
Posts: 22780
Location: In the 17th century
PostPosted: Tue Dec 08, 09 5:26 pm    Post subject: Reply with quote    

S'academic, surely?
A.

Rob R



Joined: 28 Oct 2004
Posts: 31902
Location: York
PostPosted: Tue Dec 08, 09 5:33 pm    Post subject: Reply with quote    

Chez wrote:
Talking of VAT, if one is VAT registered, is it better to buy stuff now, or in January? Does it make any difference?


Well, marginally, for cashflow it's better to buy now as you'll have less tied up in VAT until you get your refund.

On the other hand if the VAT payment gives you cheap thrills, buy in January.

beean



Joined: 04 Jun 2009
Posts: 254

PostPosted: Tue Dec 08, 09 5:41 pm    Post subject: Reply with quote    

... but if you buy it now, you'll have the cash tied up in stock when it could wait until January
As you're registered, you'll be reclaiming the VAT anyway, so you'll get the amount of VAT you paid on the purchase back anyway, so makes no odds.

Chez



Joined: 13 Aug 2006
Posts: 35907
Location: The Hive of the Uberbee, Quantock Hills, Somerset
PostPosted: Tue Dec 08, 09 5:42 pm    Post subject: Reply with quote    

Barefoot Andrew wrote:
S'academic, surely?
A.


I don't know. Our VAT quarter goes from 1st November to 31st January. And we have a LOT of stuff that I am paying out this month that will mean that we have quite a large refund in February already.

If you buy now, you have less to offset than you would if you bought in the new year. So is that good, or bad?

I never think about it, usually, I just think that if you have a VAT bill that's good because it means that you've actually sold some stuff.

Rob R



Joined: 28 Oct 2004
Posts: 31902
Location: York
PostPosted: Tue Dec 08, 09 5:43 pm    Post subject: Reply with quote    

I'm guessing January discounts may come into the equation too...

beean



Joined: 04 Jun 2009
Posts: 254

PostPosted: Tue Dec 08, 09 5:57 pm    Post subject: Reply with quote    

Chez wrote:
Barefoot Andrew wrote:
S'academic, surely?
A.


I don't know. Our VAT quarter goes from 1st November to 31st January. And we have a LOT of stuff that I am paying out this month that will mean that we have quite a large refund in February already.

If you buy now, you have less to offset than you would if you bought in the new year. So is that good, or bad?

I never think about it, usually, I just think that if you have a VAT bill that's good because it means that you've actually sold some stuff.


If you buy now, you pay VAT at 15% but you'd not be reclaiming it until the end of your VAT quarter (31 January). You'd be reclaiming it at 15% as that's what you paid.
If you buy in January, then you pay and reclaim at 17.5%, and still claim at the end of your VAT quarter, i.e 31 January. Either way all you get back is the VAT you've already paid out.
So whilst buying it in Jan would give you a bigger VAT refund (or a bigger VAT amount receivable to offset the VAT payable on sales you've made), that's only becuase you've suffered more VAT in the first place.
So really you could just by the stuff when you need to and not worry about the VAT impact.
It's good to SELL more stuff before the VAT rate changes only because it makes your prices cheaper for people who aren't VAT registered (i.e. who can't reclaim the VAT on things they've bought from you, so it's cheaper for them to buy from you and suffer 15% VAT rather than the 17.5% VAT). If you're selling only to VAT registered companies, it won't make any difference to them.

Chez



Joined: 13 Aug 2006
Posts: 35907
Location: The Hive of the Uberbee, Quantock Hills, Somerset
PostPosted: Tue Dec 08, 09 6:02 pm    Post subject: Reply with quote    

Right-ho, thanks, Beean.

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