Vat

RoryW

Has anyone considered registering for VAT and reclaiming the 21% VAT on the cost of camera body lenses etc on the basis that they are "self employed" and "starting out" as a self employed photographer even if you are subsequently initially (and maybe for a long time as you build your portfolio, contacts etc) very unsuccessful (ie no significant if any income arises).

nilhg

Rory if you register you would have to submit VAT returns every 2 months and also get an accountant to do up accounts each year, the camera and lenses would want to be very expensive if you were still to be ahead after five years (the min period you can register for).

RoryW

nilhg wrote: »

Rory if you register you would have to submit VAT returns every 2 months and also get an accountant to do up accounts each year, the camera and lenses would want to be very expensive if you were still to be ahead after five years (the min period you can register for).

who says 5 years is the min period to register for vat ?

you could do the accounts yourself so no cost just headache

vat return would not take long to do

agreed it would only make sense if you are buying expensive lens and camera

RoryW

nilhg wrote: »

Rory if you register you would have to submit VAT returns every 2 months and also get an accountant to do up accounts each year, the camera and lenses would want to be very expensive if you were still to be ahead after five years (the min period you can register for).

actually the more i think about it, it was a daft late night brain not fully working question !

nilhg

roryw wrote: »

who says 5 years is the min period to register for vat ?

you could do the accounts yourself so no cost just headache

vat return would not take long to do

agreed it would only make sense if you are buying expensive lens and camera

Rory, I am registered have been for years as a self employed sole trader, its not something to enter into lightly. I was slightly incorrect about the 5 years, you can deregister but if you do you have to pay back any money you claimed.

Loads of farmers consider this every time they need to buy an expensive machine and very few go through with it, (you could buy a lot of cameras for the price of a combine)

Fionn

once your in the net, they hunt you relentlessly, from one who was inadvertently caught up in that particular quagmire!!!

rymus

id agree with fionn.. I was registered as a sole trader for a few years and it's a pain dealing wth returns. It's probably the correct way to go eventually because you can't get paid under the table for the rest of your life (unfortunately) but there's no denying that it's a pain being under the microscope of the taxman.

JMcL

Aside from the pain of having to make returns, bear also in mind that if you want to claim VAT back on stuff like camera gear, if you ever sell prints, photograph weddings, etc on the back of that, you'll have to charge VAT on the sales. Given the currently very generous ceiling for VAT registration (can't remember the exact figure off the top of my head), you'd really be doing a lot of business to get to that level. If you're trading below that ceiling, you don't have to charge VAT which potentially means 21% (or 13.5% for photographing weddings if that qualifies as a service) in your pocket at a given price point

RoryW

JMcL wrote: »

ently very generous ceiling for VAT registration (can't remember the exact figure off the top of my head)

37,500

JMcL

roryw wrote: »

37,500

Actually I did go look it up afterwards, your figure is too high or too low depending. From the revenue VAT guide it's €35k for services, or €70k for goods. The latter figure is the one that stuck in my mind.

nilhg

One slightly strange side effect for me of being registered for my day to day business is that even though I would be unable to claim the VAT back on a camera bought here (because it's not needed for the running of my business), I can supply my Vat number when I buy from another member state of the EU and buy VAT free. It doesn't need to be included in my return.

RoryW

JMcL wrote: »

Actually I did go look it up afterwards, your figure is too high or too low depending. From the revenue VAT guide it's €35k for services, or €70k for goods. The latter figure is the one that stuck in my mind.

oops...

RoryW

nilhg wrote: »

One slightly strange side effect for me of being registered for my day to day business is that even though I would be unable to claim the VAT back on a camera bought here (because it's not needed for the running of my business), I can supply my Vat number when I buy from another member state of the EU and buy VAT free. It doesn't need to be included in my return.

actually it does ...!

see 12.1 at http://www.revenue.ie/leaflets/vatguide_chapt12.htm

nilhg

From the revenue vat guide

"sales of goods between traders who are registered for VAT indifferent Member States are zero-rated"

I've a much better case than somebody whose camera or lens has come from Hong Kong.

JMcL

nilhg wrote: »

From the revenue vat guide

"sales of goods between traders who are registered for VAT indifferent Member States are zero-rated"

I've a much better case than somebody whose camera or lens has come from Hong Kong.

But as you say, the camera you buy isn't eligible for being VAT free as it's not necessary to run your business. Since you are essentially selling the camera to yourself, you must charge VAT on it.

The VAT is payable to the Irish revenue, so if you're ordering from somebody in the UK who doesn't do enough business with Irish customers to warrant them having to charge and pay Irish VAT, they'll charge you UK VAT which is not recoverable here. If you can supply them with your VAT number, they'll ship the article free of VAT, but as I said, you need to pay VAT on the end "sale"

As regards making a return for it, you don't on a bi-monthly basis, but you DO have to account for all zero rated imports on your annual return

mikeanywhere

This might all change in the near future as I have heard rumblings in the jungle.

The VAT man is looking to target photographic businesses for the right VAT element ie 13.5% for the tog services and then the 21% for the goods ie albums etc rather then everything being charged at one rate which a lot do.

I am watching this with interest!

RoryW

mikeanywhere wrote: »

This might all change in the near future as I have heard rumblings in the jungle.

The VAT man is looking to target photographic businesses for the right VAT element ie 13.5% for the tog services and then the 21% for the goods ie albums etc rather then everything being charged at one rate which a lot do.

I am watching this with interest!

see http://www.revenue.ie/leaflets/vat_goodsandservices.htm