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i sell on ebay as a sole trader and want to keep under the…

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i sell on ebay as...
i sell on ebay as a sole trader and want to keep under the vat threshold but have made a terrible mistake with my bookkeeping and my is turnover 74k ,i did not realise postage is included in the turnover,please can you give me any advise.iam very worried
Submitted: 8 years ago.Category: UK Tax
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6/27/2010
UK Tax Professional: Sam, Accountant replied 8 years ago
Sam
Sam, Accountant
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Hi


Thanks for your question

You need to register for VAT as soon as possible and this will be backdated from the date that you hit the £70,000 threshold.

There will be VAT due for the period - which you will be responsible for and a penalty could also be applied - dependent on how long a period this has lapsed for.

I am afraid that an appeal against the penalty due to a mistake with book keeping will not be considered to be a reasonable excuse, so unless there are other mitigating circumstances, the penalty will be payable.

I have added a link here re VAT and a link here re registering for VAT

Thanks

Sam
Sam
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Customer reply replied 8 years ago
thank you for your quick reply,can you tell me a rough figure i will have to pay,i really have no idea
UK Tax Professional: Sam, Accountant replied 8 years ago
Hi

Thanks for your response

It would be impossible to calculate exactly - but as a rough idea 17.5% of all your turnover so £74000 x 17.5 = £12950 less the VAT you have suffered for the same period - which you would have to establish through your own costs -
You might to find a local accountant to handle this for you - who will also be in a best position to ensure your bill is kept to the correct minimal amount

The penalties can be as much as 100% of the tax due - but this would be in the worst situation that a person/business had not come forward to register, and evasion was seen to be have been present - which clearly is not the case here

Thanks

Sam
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Customer reply replied 8 years ago
hi thank you again,what is my situation if i will not go over the vat threshold again ,my costs are very high my profits are low ,so being vat registered i may as well stop trading .kind regards
UK Tax Professional: Sam, Accountant replied 8 years ago
Hi

If you find that you are, in the future , below the threshold for every 12 month rolling period, - then you will be able to de-register from VAT -
So perhaps by next month you then are below the threshold again - (which has to be a level that is below £68,000 rather than £70,000 for deregistration )
But for now you need to get registered and bring your affairs up to date and ensure all payments are made - then consider the position and how the turnover

Thanks

Sam
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Customer reply replied 8 years ago
hi me again , i want to mention i sell vintage goods so i cannot gaurantee my future income,how do i claim vat back on purchases that are vintage? regards
UK Tax Professional: Sam, Accountant replied 8 years ago
Hi


I should advise this is now going off topic - and you should be posting this as a new question - however I will answer on this occasion

You show this within your VAT return as VAT suffered - because if you have been charged VAT on your purchase, you claim the input tax and then pass the charge on within the sale of that item (output tax)
If you have not been charged VAT on your initial purchase, then you cannot claim the VAT but will add VAT on the sale price

Thanks

Sam
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