Possible To Un-Register for VAT and Corporation Tax

optimusgrime

Hi Guys,

I'm going to get on to Revenue about this but thought I'd ask here also.

I set up a Ltd company almost a year ago, still not trading yet but intend to be in the next month or two.

The plan has changed somewhat over the course of the year, originally i was going to be buying a lot of stock and selling this so I registered for VAT so that I did not want to have to pay the VAT on all the stock and have the money tied up there.

However the system I am going to be operating has changed now where I will only be ordering stock as it sells so it would make more sense for me not to be VAT until such as a time as I exceed the threshold.

I have filled out VAT returns for the minimal amounts of goods (sample products etc) I have purchased over the past few months and claimed the VAT back but as I say I have not started trading.

I also registered for Corporation Tax at the same time as I registered for VAT and have received the form for that also. Again I'm guessing it is not relevant, in fact I think new ltd companies are exempt from Corporation Tax for 2 years but I suppose I'll need to contact them on this one to clarify.

Any advice would be much appreciated.

Thanks

MOH

Not sure about the corporation tax, but you can deregister for VAT if you're below the threshold. I can't find the details on Revenue, google 'deregister VAT' should get it, or this thread might help

DoMyBooks

Without getting into the specifics of your situation a vat registered business can de-register using a TRCN1 subject to certain conditions. The main one being they are trading less than €37,500/€75,000

http://www.google.ie/search?rlz=1C1SVEA_enIE359IE359&sourceid=chrome&ie=UTF-8&q=trcn1

Theres some good info here in relation to the tax exemption for start ups.
http://www.grantthornton.ie/MediaandEvents/Corporation-tax-exemption-for-start-up-companies

Be careful with your limited company its very common in Ireland for companies to loose their audit exemption for missing returns.

J.Ryan

optimusgrime wrote: »

Hi Guys,

I'm going to get on to Revenue about this but thought I'd ask here also.

I set up a Ltd company almost a year ago, still not trading yet but intend to be in the next month or two.

The plan has changed somewhat over the course of the year, originally i was going to be buying a lot of stock and selling this so I registered for VAT so that I did not want to have to pay the VAT on all the stock and have the money tied up there.

However the system I am going to be operating has changed now where I will only be ordering stock as it sells so it would make more sense for me not to be VAT until such as a time as I exceed the threshold.

I have filled out VAT returns for the minimal amounts of goods (sample products etc) I have purchased over the past few months and claimed the VAT back but as I say I have not started trading.

But you plan on trading in the next few months, why bother canceling, remember if you are purchasing VAT eligible products you will pay VAT when you purchase them, if you are not VAT registered then you are paying that VAT from your own pocket, you can't charge it on.

optimusgrime wrote: »

I also registered for Corporation Tax at the same time as I registered for VAT and have received the form for that also. Again I'm guessing it is not relevant, in fact I think new ltd companies are exempt from Corporation Tax for 2 years but I suppose I'll need to contact them on this one to clarify.

Any advice would be much appreciated.

Thanks

I haven't had to deal with this yet, so I may be wrong, but, I think the exemption is from having to pay CT, not from having to file the returns, as I said I could be wrong.

Also there are restrictions on what companies qualify for this exemption, including when the company commenced to trade and when the company was incorporated.

DoMyBooks wrote: »

......Be careful with your limited company its very common in Ireland for companies to loose their audit exemption for missing returns.

So so true

optimusgrime

Hi guys,

Just wanted to come back on this and say thanks for all the replies I really appreciate it.

Just spoke to Revenue there about the Corporation Tax issue, the guy seemed a bit confused and could not offer much advice, will try ringing again on Monday and see if I can talk to someone else.

With regards to the VAT I'm going to be selling a single item online to customers for a set price (say €10). So until I reach the €75,000 threshold I'm assuming it would be better to pay VAT on the goods at this lower price as I get them from the supplier and not on the full sale price to customer? In any case there is not a vast amount of difference so I might leave it.

Finally in relation to the exception from audit just want to clarify when I'd need to apply for it.

Company was set up 15/09/2009, filed 6 month annual return on 15/04/2010.
Is my next annual return then likely to be due 15/04/2011 and will I need to file on time for this to get the exemption? Any advice would be much appreciated, I see there is a lot of talk of people loosing this so I want to be sure I do not!

Thanks again

J.Ryan

optimusgrime wrote: »

Hi guys,

.....With regards to the VAT I'm going to be selling a single item online to customers for a set price (say €10). So until I reach the €75,000 threshold I'm assuming it would be better to pay VAT on the goods at this lower price as I get them from the supplier and not on the full sale price to customer? In any case there is not a vast amount of difference so I might leave it.....

You might make more on the goods that way, but what about overheads, VAT on your broadband bill, accountants Fee's, Electricity and any other expenses you may have.