New Business Question- Importing from UK distibuter

LoGiE

Hi,

I get the feeling I'll be posting a lot....

• Ok I've set up a business as a sole trader and have my RBN cert etc.
• Registered Domain and web space.
• My next step is to open a business a/c which I plan on doing today.

Now for the questions.

At first I will be buying stock from the UK. I've bought stuff online before with my credit card that was just personal and not business.

• I will be ordering wholesale from distributors in the UK so do they invoice my company or do I pay them with a business Credit Card?
  
• As the UK is part of the EU and I wont earn enough to register for VAT do I need to pay fees other then price of goods and shipping costs?

More questions to come and would appriciate any advice people have for me.

Thanks,

LoGiE

Snowdrop

Congratulations on your new venture.

If you are not registered for VAT, your UK supplier will charge you UK VAT and this is not recoverable.
If you are registered for VAT in Ireland, you can give them your VAT number and they won't charge you VAT.

I would have thought it unlikely that your UK supplier will give you credit. If not, your best bet would be to pay by credit card or bank transfer.

LoGiE

Thanks for the quick reply Snowdrop. So I am better of registering fro VAT regardless of how much I make in my first year simply because I will be importing all my stock?

So I import the stock of the UK and they deduct UK VAT from the Price. I then declare this to the taxman here yes?

Thanks,
LoGiE

Snowdrop

You need to consider 3 things:

1. Who and where are your customers? Are they likely to be VAT registered and able to reclaim the VAT you charge them if you are registered yourself?

2. Cashflow-if you register for Irish VAT and can import from the UK VAT free, this will help your cashflow.

3. Regardless of whether you are VAT registered or not, you usually have to pay VAT on items bought from within Ireland. You can claim it back if registered.

So on this basis without knowing much about your business, I would say yes, register for VAT. You will have to file returns and declare your imports to the taxman but it is not complicated.

tombull82

you then charge irish VAT to your customers and pay it back in your businesses VAT returns. i.e you collect it from the customers on the states behalf

LoGiE

Ok thanks guys!

I've downloaded the TR1 Form and filled it out to register for VAT

Order from UK suppliers

• They remove UK VAT from wholesale price

Sell stock to public

• Add Irish VAT 21.5% and keep records to pay Revenue at end of year

Cheers,

LoGiE

tombull82

you then charge irish VAT to your customers and pay it back in your businesses VAT returns. i.e you collect it from the customers on the states behalf

tombull82

damn mobile boards. It double posts.

Snowdrop

That's it in a nutshell except you will have to pay the VAT over to Revenue every four months.

kenbrady

Snowdrop wrote: »

So on this basis without knowing much about your business, I would say yes, register for VAT. You will have to file returns and declare your imports to the taxman but it is not complicated.

LoGiE wrote: »

Ok thanks guys!

I've downloaded the TR1 Form and filled it out to register for VAT

Order from UK suppliers

• They remove UK VAT from wholesale price

Sell stock to public

• Add Irish VAT 21.5% and keep records to pay Revenue at end of year

Cheers,

LoGiE

Are your customers VAT registered ???
If they are not see below and the impact it has on your profits margins


VAT Registered

Supplier Price (no vat)
50

Sales Price (includes vat of 21.5)
121.5

Profit
50

NOT VAT Registered

Supplier Price
57.5

Sales Price
121.5

Profit
64

LoGiE

Hmmm I see your point. So basically if I don't register VAT until I have too (Due to income) I make a better profit because of the lower VAT rate and currency differences.

kenbrady

LoGiE wrote: »

I make a better profit because of the lower VAT rate

small part of it

LoGiE wrote: »

and currency differences.

nothing to do with it

you make a better profit as you don't have to charge VAT so the full retail price is all yours.