Help re vat

meeting123

Hi Folks,

Hope someone can help me out. I've just set up a website selling Angel Cards. I sell directly to the retailer and understand the vat implications there. However this website will primarily be selling to the public at €2.99 a card. Do I have to deduct 21% from this purchase price to give to the vat man?? On my website should I be displaying the purchase price at €2.99 or should I be displaying it at €2.36 plus vat of 63 cents or does it really make a difference when I'm doing my tax returns?

Is there a vat exemption for religious products??

I'd love to hear from someone who knows.

Many thanks,
Linda.

barneystinson

meeting123 wrote: »

Hi Folks,

Hope someone can help me out. I've just set up a website selling Angel Cards. I sell directly to the retailer and understand the vat implications there. However this website will primarily be selling to the public at €2.99 a card. Do I have to deduct 21% from this purchase price to give to the vat man?? On my website should I be displaying the purchase price at €2.99 or should I be displaying it at €2.36 plus vat of 63 cents or does it really make a difference when I'm doing my tax returns?

Is there a vat exemption for religious products??

I'd love to hear from someone who knows.

Many thanks,
Linda.

Whatever about any of the rest of it, if your selling price is 2.99 including VAT...

This means 2.99 = 121%
The net price (100%) is therefore 2.99 / 121 x 100 = 2.47
The VAT (21%) is therefore 2.47 x 21% = 0.52

meeting123

barneystinson wrote: »

Whatever about any of the rest of it, if your selling price is 2.99 including VAT...

This means 2.99 = 121%
The net price (100%) is therefore 2.99 / 121 x 100 = 2.47
The VAT (21%) is therefore 2.47 x 21% = 0.52

Thank you so much. Can I just ask one more question - I'll be covering postage to anywhere in the world so do I take that cost off and re assess the vat based on the price without postage?

barneystinson

meeting123 wrote: »

Thank you so much. Can I just ask one more question - I'll be covering postage to anywhere in the world so do I take that cost off and re assess the vat based on the price without postage?

No - If you are selling the product for 2.99 then that is the value you calculate the VAT on.

The postage cost is part of your overheads / expenses.

A question for you now - why are you registering for VAT at the outset? Unless you have substantial costs that would result in you getting VAT refunded to you, then generally you would be better off to wait until your turnover exceeds the €75k threshhold before registering for VAT. I think you need to sit down with someone who understands this stuff - have you been to your local enterprise board etc...?

dbran

Hi

I believe the what you said re the VAT on postage may not be totally correct as it depends on how the cost of the postage is calculated by the seller. (You are usually correct in most things:))

Taken from the VAT guide:

9.11 Postage and insurance - reimbursement
Where amounts are charged separately for postage and insurance and paid over in their entirety to An
Post or to the insurer on behalf of customers, suppliers may treat such charges as not being subject to
VAT. If, for example, a trader charges an extra c5 for posting an order and such amount of postage is
actually paid over to An Post, the c5 may be treated as exempt. Similarly, if a car hire company charges
c50 for motor insurance and that amount is actually paid over in full to insurers the c50 is treated as
exempt.However, if a charge is made for posting and/or insurance, and a lesser amount is paid over by
the supplier to An Post or to the relevant insurance company, the charge made to the customer is
regarded as part of the total price of the goods/service supplied, and is subject to the VAT rate applicable
to the goods/service in question.

So if you charge out the actual postage cost to the customer you do not have to charge VAT on the postage. But if you use a generic charge out rate and that rate is more then the actual postage cost then you must charge VAT on the entire amount.

Regards


dbran

barneystinson

dbran wrote: »

Hi

I believe the what you said re the VAT on postage may not be totally correct as it depends on how the cost of the postage is calculated by the seller. (You are usually correct in most things:))

Taken from the VAT guide:

9.11 Postage and insurance - reimbursement
Where amounts are charged separately for postage and insurance and paid over in their entirety to An
Post or to the insurer on behalf of customers, suppliers may treat such charges as not being subject to
VAT. If, for example, a trader charges an extra c5 for posting an order and such amount of postage is
actually paid over to An Post, the c5 may be treated as exempt. Similarly, if a car hire company charges
c50 for motor insurance and that amount is actually paid over in full to insurers the c50 is treated as
exempt.However, if a charge is made for posting and/or insurance, and a lesser amount is paid over by
the supplier to An Post or to the relevant insurance company, the charge made to the customer is
regarded as part of the total price of the goods/service supplied, and is subject to the VAT rate applicable
to the goods/service in question.

So if you charge out the actual postage cost to the customer you do not have to charge VAT on the postage. But if you use a generic charge out rate and that rate is more then the actual postage cost then you must charge VAT on the entire amount.

Regards


dbran

Thanks for clarifying that dbran, (and I must confess I'd forgotten about that!) but based on what the OP has said, she's not charging the customer for P&P.

Unless I'm reading her post wrong, she says she's going to charge the same 2.99 to all customers and bear the cost of P&P herself. The above only applies where the trader is charging their P&P cost onward to the customer, not unlike the way some professions bill for outlays...