Not VAT registered - how will affect UK supplier?

gavney1

Hi All

My brother and I have started up a company recently, selling goods online.

We have only a turnover of approximately 2K so far. By christmas, it should have reached 35K or so.

So, afaik, there's no requirement for us to register for VAT yet until we reach the 75K threshold for supply of goods.

However, we have bought most of our goods from a UK supplier.
They have asked us for our VAT number, which I don't have.

If I apply now, I imagine we'll be registered in a month or so.

How will it affect our UK supplier if we DON'T supply them with a VAT number on this order? Do they lose out?

Thanks

fergald24

Without a VAT number they will be obliged to charge you UK VAT on the items they supply you with. If you registered for VAT and provided this to them, they would apply no VAT on the items and you would be required to account for Irish VAT on a reverse charge basis, i.e. pay the VAT due on the purchase to Revenue and reclaim this VAT amount to the extent that it is deductible (probably should be if they are charging you VAT in the first place) ending up with an in and out in the VAT return and no VAT due. Whilst registering for VAT will allow to receive these goods without the imposition of VAT, you will have to return VAT on your sales.

gavney1

Thanks for the reply Fergal.

I will have a think about this and may have more questions!

Alan Shore

You need to be aware that you are obliged to register for VAT if your turnover is expected to be over €75,000 in a year NOT when you reach €75,000.