VAT on UK Imports

Mosey101

Just one question on Vat which is not making heads nor tails for me right now.

I'm buy stock in from the UK and pay a zero rate of VAT on it but when obviously when i sell it i but the 21% on it.

Just in my VAT returns, when i'm calculating the amount owed (My T2 amount), do i put in 21% of my UK purchases or do i put in the full amount. I've consulted the VAT website but haven't been able to make heads nor tales of it.

Any help on this is greatly appreciated.

Odats

You should account for it by what is called a paper transaction (reverse charge basis). Basically whatever goods you buy in from the UK which is a 0% VAT you account for in sales @21% (assuming this is the correct rate for your goods per the OP) and purchases @21%. Thus in effect there is zero effect on the transaction. When you ultimately sell the goods you will account for VAT on Sales at 21%.

Da GOAT

as above, dont account for both a 0%. count both at 21%, on vat returns just add your working to highlight UK purchases.

Mosey101

I think i understand. . . and i think not. . .

So essentially, i charge my 21% on sales as normal and when filling out my returns, i put the 21% onto my zero Vat, UK purchases as well as any other VAT paid purchases made locally.

Would it be true to say then, for cash flow purposes that buying from abroad where you pay zero VAT is a good thing?

NCG

Mosey101 wrote: »

Would it be true to say then, for cash flow purposes that buying from abroad where you pay zero VAT is a good thing?

Yes, you get a few months' cash flow benefit (immediate instead of your next VAT3 return).