eBay Electronics Business - VAT/TAX ???

sham09

Hi ,

I am looking into starting a business selling electronics on eBay.

Currently, my plan is to import the electronic items from Hong Kong/China, and have them shipped direct to me in Ireland. I will repackage them and sell them on eBay. I will then ship my items from Ireland using An Post etc...

I plan to operate this business part-time with a friend. We are both currently employed and are registered as PAYE workers. We are wondering which is the best route to embark on with regard to company registration. Do you recommend we : (A.) Register as a Sole-Trader Or (B.) Register as a Limited Company.

I understand each of these has its own unique advantages & disadvantages, but in our situation I am wondering can anyone shed some light for us with regard to Tax & VAT etc...

We are completely lost when it comes to VAT. As we will selling items which we will be importing from another country, we are unsure whether we must pay import tax/duty on these goods? We are unsure whether we have to charge VAT on our sales, or collect VAT for the Revenue Commissioner. It would be most appreciated if anyone with a knowledge in this area could help us out.

We are very ambitious and feel in this current economic climate its the best time to start a little business of our own!

Thanks in advance, I look forward to hearing from everyone

DubTony

Mods, we definitely need a VAT sticky on here.

OP, you'll pay VAT and any import duties that are due. If you register for VAT you can reclaim the VAT. You should then charge VAT on all sales and make the return to Revenue when due.

The VAT you return to Revenue is the amount on sales less the amount you've been charged when purchasing goods / equipment etc.

RUDOLF289

Hello Sham09,

I would suggest you have a word with an accountant to advise you on the best options : Sole Trader v Limited Company. As a sole trader you pay tax on all income. Especially since you may be looking at a partnership, being a sole trader may not actually suit. An accountant would help you with that.

Attached please find ; VAT Guide 2008 (I believe that is still the latest)

The most relevant chapters to read are ; 1,2,3,7

As you intend to import, I would recommend you register for VAT. That will enable you to re-claim VAT paid on imports in your bi or 4 monthly VAT return.

Also, if you do less than 1Million turnover per annum, you can register to remit VAT on receipt of payment from your clients, rather than on invoice. Your accountant would advise you on this aspect. Perhaps, because you do mail order sales, there is little or difference between the time you raise the invoice and the time you receive payment.
Have a look on the revenue website for the various leaflets available in relation to VAT http://www.revenue.ie/en/tax/vat/leaflets/

I will do a separate post on the duty and imports

Regards,
Rudolf289

RUDOLF289

Hello Sham09

Please see attached document relating to shipping / imports.
Be carefull when buying on a C&F/CIF/CFR basis where you leave the shipping arrangements to your supplier. There have been instances (and I have commented on them before) where the supplier got a very low freight only for the consignee here in Ireland to be landed with a very high bill for "local charges".

When you get to the shipping and distribution stage, let me know and I would be happy to guide you and make sure you get competitive costs.

Best of luck with your new venture

Regards,
Rudolf289